India’s latest GDP numbers have triggered a debate over whether the economy’s strong growth is as solid as it appears. Neelkanth Mishra, Executive Director at the World Bank for India, Bangladesh, Sri Lanka and Bhutan, has saying several other indicators point to a strong and broad-based recovery.
Mishra said the economy’s growth momentum has strengthened as credit growth has picked up and fiscal headwinds have faded. He believes India’s trend growth could move above 7%, with the economy potentially growing at 7.5% even under neutral fiscal and monetary policy.
Mishra also took aim at claims that the would have been much lower if the original June 2025 base had been used.
“In this light, I was shocked to see the ill-educated and egregiously wrong claims made by some that if the ‘original’ base of June-2025 quarter was used, growth in the June-2026 quarter would be much lower,” he said in a post on X.
He said the new GDP series introduced in February 2026 had cleaned up the data and significantly improved the methodology.
“For those who track this for a living (and I used to be one such till 45 days ago) – the downward revision in the base was known in March,” Mishra said.
He added that the new series had improved the credibility of estimates of real output.
Mishra said such claims were gaining attention despite several logical rebuttals. “Bad information tends to travel further than good information,” he said, arguing that it was important to reinforce the facts around the latest GDP numbers.
According to Mishra, the strength seen in the GDP data is also reflected in several economic indicators that are difficult to manipulate.
He pointed to strong vehicle sales as one sign of improving consumer demand. Personal vehicle dispatches, including cars and SUVs, grew 35% year-on-year in August, even though exports grew by only 9%.
“Even two-wheeler growth is now >20% (though helped by strong exports),” he said.
Commercial vehicle dispatches also grew by more than 40%, pointing to stronger economic activity beyond household consumption.
Mishra also highlighted improving tax collections and faster credit growth.
“Credit growth continues to surprise on the upside (albeit on a low base),” he said.
He added that weak credit growth had earlier been seen largely as a demand problem, but his view was that it was mainly a supply-side issue, which has now been addressed.
Mishra also pointed to robust construction indicators as evidence that investment activity is holding up.
“Hopefully, now there will be fewer people asking ‘why private sector investment is weak,’ given that there is clear evidence of investments,” he said.
However, he also cautioned that the economy still has some slack. Weak real-wage growth, he said, is one sign that demand has not yet fully tightened.
“It may take several quarters of above-trend growth for that slack to tighten, and bring back sticky inflation pressures,” Mishra said.