Economists Spar Over India's 7.8% GDP Print as SBI, Former Chief Economic Adviser Defend the Data

A dispute over how to read India's latest growth numbers spilled into the open on Thursday, with the State Bank of India and a former Chief Economic Adviser separately defending the Ministry of Statistics' 7.8 percent real GDP growth estimate for the April-June quarter of FY27 against criticism that the figure was flattered by a revision to the previous year's base.

Where the Criticism Came From

The controversy traces back to a base revision in India's National Accounts Statistics, under which current-price GDP for the year-ago quarter was restated downward, from roughly Rs 86 lakh crore to closer to Rs 80 lakh crore. Former Finance Secretary Subhash Chandra Garg argued that once this revision is accounted for, nominal GDP growth for the quarter works out to only about 2.6 percent, a far less flattering number than the headline real growth figure, and one that critics say points to underlying weakness in the economy that the 7.8 percent print obscures.

SBI's Rebuttal

In a research note, the State Bank of India's economists rejected that framing, arguing that the 2.6 percent calculation compares figures that were never meant to be compared directly. The bank noted that the base-year restatement was carried out specifically so that GDP deflators and volume estimates would stay consistent with parallel revisions already made to India's consumer price, wholesale price, and industrial production indices. Viewed that way, SBI said, comparing the newly aligned Rs 88.3 lakh crore estimate for the latest quarter against the older, unrevised Rs 86.1 lakh crore figure for the year-ago quarter is an apples-to-oranges exercise that understates growth rather than exposing it.

The Methodology Defence

Separately, former Chief Economic Adviser Krishnamurthy V. Subramanian weighed in to defend the broader methodology behind the numbers, including the ministry's use of "double deflation" in calculating manufacturing sector output. Under this approach, statisticians deflate the value of output and the value of intermediate inputs separately, each using the price index most relevant to it, before arriving at a real, inflation-adjusted measure of value added. Subramanian said this is a more accurate technique than applying a single blanket deflator, even though it can occasionally produce counterintuitive results, such as a negative deflator for manufacturing that does not, by itself, mean factory-gate prices actually fell. The Ministry of Statistics and Programme Implementation issued its own clarification along similar lines on Thursday, stating that revisions reflect improved data sources and methodology rather than an attempt to inflate growth optics.

Why It Matters for Markets and Policy

The exchange matters beyond academic economics circles. GDP prints feed directly into how the Reserve Bank of India calibrates interest rate policy, how rating agencies assess India's growth trajectory, and how foreign investors size up the credibility of official statistics relative to peer emerging markets. A sustained credibility gap around headline numbers, even if the underlying technical defence is sound, can complicate that broader signalling function. For now, both SBI and the government's own economists appear to be closing ranks around the 7.8 percent figure, though the debate over how India's statistical revisions are communicated to the public is unlikely to be fully settled by Thursday's exchange of statements.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.