GDP Explained: Govt Clarifies Methodology After Debate And Ex-Finance Secretary’s 2.6% Growth Claims

The Ministry of Statistics and Programme Implementation (MoSPI) has clarified India’s GDP estimation methodology, the negative manufacturing deflator and the revisions made to the first-quarter GDP estimates. This clarification comes after debate over the GDP data released and Former Finance Secretary Subhash Chandra Garg questioning the 7.8% GDP growth data for the first quarter of fiscal year 2026-27.
In a post on X Subhash Chandra Garg stated, “I explain analytical base of my conclusion that GDP growth in Q1 in 2026-27 in current price is 2.6% and in real terms close to 0. There are still messier distortions in sectoral performance with manufacturing and consumption witnessing negative growth.” In fact in an interview to Times Now, Former Finance Secretary Subhash Chandra Garg said, “I am not comparing nominal GDP with real GDP. I’m comparing this year’s nominal GDP with last year’s nominal GDP. Real GDP is derived from that. Base-year revisions are normal, but the concern is why nominal GDP for the past three years has been revised down so significantly.” The debate has raised questions about how changes in the GDP series, base year, data sources and methodology affect comparisons with earlier estimates.
The Ministry of Statistics and Programme Implementation (MoSPI) clarified India’s Q1 FY27 GDP estimates, explaining that the -1.5% manufacturing GVA deflator does not mean manufacturing prices fell by 1.5%. Instead, it reflects the impact of separately deflating manufacturing output and intermediate consumption under the double-deflation method, including the effect of input prices rising faster than output prices. MoSPI also said the revision in Q1 FY26 GDP, from ₹86.05 lakh crore under the earlier series to ₹80 lakh crore under the new series, resulted from the introduction of the 2022-23 base year, updated data sources, indicators and methodologies. The ministry said the revisions were methodological and data-driven, rather than aimed at boosting the reported growth rate. MoSPI further explained why the GDP deflator differs from CPI and WPI, why double deflation does not directly determine PFCE, and the reasons behind the sharp rise in mining’s nominal GVA.
Senior Economist Mitali Nikore told Times Now Digital, “earlier, India used a single broad price index to deflate GDP, with only about 180 price items in the deflator basket. Now, for key sectors like manufacturing and agriculture, it uses double deflation (separate output and input price indices) and around 500–600 item-level indices instead of one coarse index.”