India’s needs closer scrutiny because the base used to calculate the growth has changed, said former Finance and Economic Affairs Secretary Subhash Chandra Garg.
In an interview with Business Today, Garg said the real GDP data for the first quarter of the previous year was not available under the new series. The figure for that quarter had been released under the old series, while the number now being used as the basis for Q1 of 2026-27, has been released under the new series.
“I think this is a serious question which we should really examine. The growth 7.8% in this quarter on the face of it looks very good,” Garg said.
Garg said the change in the base makes a direct comparison difficult and that the GDP numbers should also be examined at current prices.
“Therefore, comparing it with that base should be taken with a little bit of a pinch of salt. The better sort of analysis is done in terms of the GDP growth in current prices,” Garg said.
Garg also pointed to a for Q1 of 2025-26.
He said the government’s revised data now puts nominal GDP growth for the quarter at 10.3%.
“If you had taken the numbers which were put out last year as the GDP at current prices, the growth is less than 2.5% at current prices, nominal GDP,” he said.
Garg said the difference is significant because the current price growth rate changes substantially depending on whether the revised base or the figure released last year is used.
Garg said the change in the base and the sharp revision in current-price GDP together have made him question whether the 7.8% growth rate is a genuine reflection of economic activity.
“These two factors give me a kind of little bit of a doubt about whether 7.8% is genuine or not,” he said.
In a separate interview with India Today, Garg said he is aware that when a new GDP series is introduced, changes in the data can be expected.
He explained that a new series can include new products and companies, while some that were counted earlier may no longer be included. Such changes can affect the value of production.
According to him, there is no issue if changing the series results in a change in the production value. The concern, he said, is the size of the revision and the lack of an explanation for it.
Garg said that if the change in the new series brings the GDP figure down significantly, there needs to be clarity on what has changed.
He pointed to a sharp reduction in GDP at current prices. According to him, GDP for 2023-24 was reduced by around Rs 12 lakh crore after the switch to the new series.
Garg said such a large reduction needs to be explained clearly. He also pointed to changes across different parts of the GDP data.
He said agriculture and mining have seen increases, while manufacturing has been reduced significantly. He also pointed to changes in investment expenditure and consumption, saying consumption has been “drastically reduced”.
For Garg, these changes make it important to understand what has changed between the old and new GDP series.
The comments come amid a wider debate over the 7.8% GDP growth recorded in the April-June quarter, with questions being raised over the impact of the new GDP series and revisions to the previous year’s data.