India’s GDP data: India’s economy grew by 7.8% in the first quarter of 2026–27, according to the new national accounts series. The estimate exceeded the Reserve Bank of India’s forecast of 7% and revived an old argument about the reliability of India’s economic statistics. Critics have focused on the downward revision of the previous year’s base, while others have questioned the price indices used to convert nominal output into real growth.
The questions are legitimate. The new series changes the base year from 2011–12 to 2022–23, revises several data sources and introduces double deflation in parts of the economy. These changes need close examination. Yet the debate has often mixed numbers produced under different statistical frameworks. It has also paid insufficient attention to the economic indicators underlying the headline estimate.
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Manufacturing and services support India’s GDP growth
Manufacturing expanded by 9.2% during the quarter, while the secondary sector grew by 8.6%. Production of electrical equipment rose by 27% and that of other transport equipment by 19.5%.
Some forward-looking indicators also strengthened. Capital goods production accelerated from 8.8% a year earlier to 15.2%. Imports of machinery and equipment grew by 51.5%, against 16.5% in the corresponding quarter last year. Growth in goods-vehicle registrations rose from 6.1% to 20.1%. These figures suggest an increase in industrial activity and investment demand, though imports and vehicle registrations cannot by themselves establish the strength of domestic value addition.
Infrastructure indicators were consistent with this picture. Cement production increased by 8.9%, finished steel consumption by 8.3% and electricity generation by 9.3%. Commercial vehicle sales rose by 18.3%, while three-wheeler sales grew by 29.7%.
Services made a larger contribution. The tertiary sector expanded by 10%, compared with 8% a year earlier. Financial, real estate, information technology and professional services recorded growth of 12.1%. The performance of these sectors provides some support for the official estimate, although aggregate services data can conceal wide differences between organised businesses and smaller enterprises.
Investment accelerated, while consumption remained steady
The expenditure estimates also indicate stronger activity. Gross fixed capital formation, which measures investment in assets such as machinery, buildings and infrastructure, grew by 11.9%. It had increased by 5.8% in the corresponding quarter of 2025–26.
Exports at constant prices rose by 12%, compared with 6% a year earlier. Private final consumption expenditure grew by 7.1%. The combination of higher investment, exports and household consumption makes the 7.8% estimate economically plausible.
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Such indicators cannot validate a GDP estimate individually. Industrial production, vehicle registrations and merchandise trade cover only parts of the economy and are compiled differently from the national accounts. Their value lies in whether they tell a broadly consistent story. In the latest quarter, most of them point towards an expansion in activity rather than the stagnation implied by some readings of the GDP controversy.
Why the old and new GDP series cannot be mixed
The sharpest criticism concerns the revision of the previous year’s nominal GDP. Under the former 2011–12 series, nominal GDP for the first quarter of 2025–26 was estimated at ₹86.05 lakh crore. Under the 2022–23 series, the estimate for that quarter is about ₹80 lakh crore. Nominal GDP for the first quarter of 2026–27 has been placed at ₹88.27 lakh crore.
Comparing ₹88.27 lakh crore under the new series with ₹86.05 lakh crore under the old one produces nominal growth of about 2.6%. That calculation has been presented in parts of the public debate as evidence that the official 7.8% real growth estimate is overstated.
The comparison is methodologically invalid. The two estimates use different base years, databases, sectoral weights and estimation procedures. Growth under the new series must be calculated against the previous year’s estimate reconstructed under the same framework.
This does not settle every question about the revision. A reduction of roughly ₹6 lakh crore in the estimate for one quarter requires a detailed reconciliation. The Ministry of Statistics and Programme Implementation should publish enough information for independent economists to identify which sectors and methodological changes account for it. The problem with the 2.6% claim lies in the comparison being made, not in the demand for an explanation.
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The deflator requires greater disclosure
The second dispute concerns the conversion of nominal output into real output. Nominal manufacturing gross value added grew by 7.7%, while real manufacturing GVA increased by 9.2%. This implies a manufacturing deflator of about minus 1.5%.
A negative deflator is possible when the prices of inputs and outputs move differently. Under double deflation, output and intermediate inputs are deflated separately before real value added is calculated. The method is preferable to applying a single price index when input costs and selling prices diverge. India’s revised system introduced double deflation in key sectors as part of a wider overhaul of the national accounts. Reuters reported on the methodological changes before the new series was released.
A GDP deflator should not be treated as another version of consumer inflation. The Consumer Price Index measures changes in the prices paid by households. The GDP deflator covers domestically produced goods and services, with weights that change with the composition of output. The two measures can therefore move differently.
That distinction does not remove the need for scrutiny. Users need to know which price indices have been applied to major sectors, how weights were constructed and how double deflation affected measured value added. The debate following the Q1 release shows that methodological improvement without adequate disclosure will not make the estimates easier to assess.
India’s GDP data must be open to examination
The 2022–23 series draws on newer sources, including the Annual Survey of Unincorporated Sector Enterprises, administrative records and digital databases. This should improve estimates of informal businesses and sectors that were poorly captured by older benchmarks. Revised methods for banking and other services are also intended to reflect the changing structure of the economy.
The benefits will depend on how the data are used. Administrative records can improve coverage, but they were generally created for taxation or regulation rather than national accounting. Statistical agencies must explain how such records are cleaned, classified and adjusted for missing observations.
Agriculture provides another qualification to the headline number. Agriculture and allied activities grew by 3.6%, while the primary sector expanded by 2.9%. Manufacturing and services therefore accounted for much of the acceleration. A national growth rate of 7.8% need not correspond to equally strong income growth across regions, occupations or household groups.
The available indicators support the conclusion that the economy gathered momentum in the June quarter. They do not place the estimate beyond challenge. MoSPI can strengthen confidence by publishing a bridge between the old and new series, sector-level deflators and fuller documentation of its revisions. India’s statistical system will earn credibility through estimates that independent researchers can reproduce and contest.
This article draws from a discussion on the subject organised by EGROW Foundation, a Noida-based think tank.