SUJEET KUMAR
A curious debate has taken over our national discourse recently, centred on the credibility of India’s economic performance. Following the release of the Gross Domestic Product estimates for the first quarter of fiscal year 2026-27, which showed a 7.8 per cent real growth, critics have painted a picture of stagnation. They claim that if the previous year’s nominal estimates had not been revised, our actual growth would stand at a mere 2.6 per cent. This claim, however, relies on a fundamental statistical misunderstanding-comparing numbers from two entirely different, incomparable series.
The nominal GDP figure of 86.05 lakh crore rupees for the first quarter of the previous fiscal year was calculated and published under the old 2011-12 base-year series. Comparing this directly with the current quarter’s nominal GDP of 88.27 lakh crore rupees, calculated under the newly introduced 2022-23 base-year series, is a classic error.
To derive a growth rate by subtracting one from the other is not economics; it is a textbook case of comparing entirely different datasets. Any valid statistical comparison requires a consistent framework. You cannot measure a child’s height in inches one year, in centimetres the next, subtract one from the other, and claim the child has shrunk. Yet, this is exactly what has been done to our national data.
This transition of the base year was not an overnight manoeuvre designed to make the latest quarter look better. The Ministry of Statistics and Programme Implementation introduced the modernized 2022-23 base-year series in February 2026, after years of preparation. Re-basing is a standard, transparent statistical exercise carried out periodically to align national accounts with structural shifts in the economy, updated data sources, and international standards.
A key proof of the integrity of this process lies in its asymmetry: the base-year transition did not systematically lower all historical figures. Instead, reflecting the reality of structural changes, some sectors and quarters were revised upward based on newly available indicators, while others were adjusted downward. It was a data-driven modernisation, not a targeted downward squeeze.
There is a familiar pattern of backpedaling when these critical narratives are confronted with hard facts. We often hear prominent critics, like former Reserve Bank of India Governor Raghuram Rajan, try to distance themselves from their own claims when the data is shown to be unassailable. In a recent defensive posturing, he sought to soften his stance by claiming that every so often, he gives a media interview, and clips from that interview then circulate over social media, suggesting he is commenting on recent events.
He stated that he has nothing to say on the recent GDP numbers, and has neither questioned them nor endorsed them. Instead, he argued that it would be reasonable to say that he has “puzzled” over the path of our GDP numbers for a while-wondering why we do not see more private investment, more FDI, and more decent jobs if growth is so strong. He then left the calculations to those who are more expert at GDP compilation.
But this attempt to suggest that growth is not happening because of a supposed lack of jobs or investment is simply a convenient narrative that falls apart when we step outside the television studios and look at what is actually happening on the ground. Can an economy growing at a mere 2.6 per cent support the activity we are currently seeing?
Commercial vehicle sales are up 18.3 per cent, three-wheeler sales nearly 30 per cent, and goods transport registrations over 20 per cent. Cement production has grown 8.9 per cent, finished steel consumption 8.3 per cent, and capital goods output over 15 per cent. None of this happens in a stagnant economy. Nor do GST collections rise 8.4 per cent, as they have this quarter, in an economy where people are not spending and earning. Fleet operators do not buy more trucks, factories do not consume more steel, and tax collections do not climb, on the strength of an economy that has barely moved. Genuinely productive economic growth is taking place, and it is directly creating opportunities and demand across the country.
Some critics have also pointed to a negative manufacturing deflator of 1.5 per cent as evidence of data manipulation. It is nothing of the sort. In modern national accounting, output and inputs are deflated separately to measure real growth more accurately. When input prices-especially for raw materials and energy-rise faster than what manufacturers can charge for the final product, profit margins are squeezed.
Consequently, the value of what is added can grow slower in nominal terms than in real, volume-based terms. In this first quarter, manufacturing GVA grew 7.7 per cent in nominal terms but 9.2 per cent in real terms, yielding a negative implicit deflator. This does not mean factory-gate prices fell; it simply reflects the shifting margin pressures caused by raw material cost surges. It is a well-documented phenomenon that advanced economies regularly experience similar negative deflators during global supply-side shocks.
The rest of the economy tells a similarly consistent story of expansion. Our services sector continues to act as a powerful engine, growing by 10 per cent in real terms, spearheaded by a 12.1 per cent expansion in financial, real estate, and professional IT services. Construction grew by 7.7 per cent, while agriculture recorded a steady 3.6 per cent growth.
Even the apparent divergence in the mining sector-where real output fell by 2.4 per cent while nominal value rose over 22 per cent-is explained entirely by standard economic price behaviour during global supply shocks, as crude oil and gas prices skyrocketed during the quarter. These are standard, observable economic phenomena that have everything to do with relative price shifts and nothing to do with data manipulation.
One can always debate methodology or suggest refinements to quarterly estimates; that is a healthy and necessary part of any democracy. But dividing numbers from two completely different series and presenting the result as a hidden truth is a mistake dressed up as an expose. It does a disservice to the statisticians, economists, and ordinary citizens whose daily efforts these numbers are meant to reflect.
The Indian economy faces real challenges in a volatile global environment, and we are working day and night to address them. We already have enough real-world challenges to tackle; we certainly do not need artificial ones manufactured by politically motivated narratives. The hard numbers are clear, our physical indicators are booming, and India’s march towards a Viksit Bharat will not be stopped by statistical sabotage.
(Author is Member of Parliament, Rajya Sabha)
(The content of this article reflects the views of writer and contributor, not necessarily those of the publisher and editor. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Delhi/New Delhi only)
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