As the official GDP growth figures have sparked a debate after incorporating a revised base year and updated historical estimates, a report from SBI Research on Wednesday pushed back against criticism of the data, arguing that comparisons being used to question the growth rate are based on mismatched statistical series.
It termed attempts to derive a much lower nominal growth rate of around 2.6 per cent as fallacious, saying such calculations compare GDP estimates drawn from two different base-year series.
It said that India’s economy grew a stronger-than-expected 7.8 per cent year-on-year in real terms and 10.3 per cent in nominal terms during the first quarter of FY27.
The controversy arose after the NSO’s latest GDP release under the revised 2022-23 base year lowered the nominal GDP estimate for Q1FY26 to about Rs 80 lakh crore, compared with the earlier estimate of Rs 86.1 lakh crore under the previous base.
The report further argued that some commentators have incorrectly compared the latest Q1FY27 figure with the older Q1FY26 estimate.
A comparison using the revised base year would yield nominal growth of nearly 9.7 per cent which is broadly consistent with the official estimate of 10.3 per cent.
Even under this alternative calculation, the implied real GDP growth would be around 7.4 per cent, it added.
SBI Research emphasised that revisions are an integral part of the GDP compilation process and occur in both directions as more comprehensive data become available.
The report said the alignment was undertaken to improve consistency between price indicators, production measures and GDP deflators, while also enhancing transparency by incorporating revised historical data alongside the latest quarterly estimates.
Highlighting the nature of GDP revisions, SBI Research noted that the Q1FY27 figures released now will only be finalised by February 2029 after multiple rounds of revisions based on additional information.
In addition, SBI Research also rejected suggestions that the latest base-year revision artificially inflated India’s economic size.
On the contrary, it noted that the base revision has resulted in a lower nominal GDP estimate compared with the earlier series.
However, SBI Research further observed that historical data show revisions are common and often move in both directions.
