India’s 7.8 per cent GDP growth in the first quarter of FY2026–27 has sparked debate over the revised GDP series, now based on 2022–23 as the new base year. Economists say changes in earlier-year estimates are an expected consequence of rebasing and revised data sources, not an adjustment made to improve the growth figure.
India’s latest GDP growth estimate has triggered a debate over the methodology used to calculate economic growth, particularly after the first-quarter GDP estimate for FY2025–26 was revised under the new 2022–23 base year.
The debate intensified after former Finance Secretary S.S. Garg questioned why the GDP estimate for the first quarter of FY2025–26 was lower in the revised series. Former Chief Statistician of India T. C. A. Ananth, however, said the change was an expected consequence of shifting the base year from 2011–12 to 2022–23.
The first quarter of FY2026–27 is the first quarterly GDP estimate prepared using 2022–23 as the base year instead of 2011–12. When a base year changes, historical GDP estimates are also recalculated using the revised methodology so that growth in the current period can be compared with a comparable previous period.
Under the earlier 2011–12 base, GDP for the first quarter of FY2025–26 was estimated at around INR 86.1 lakh crore. Under the revised 2022–23 base, the corresponding estimate is around INR 80 lakh crore. Similarly, full-year GDP for FY2025–26, earlier estimated at around INR 357 lakh crore under the old base, is around INR 345 lakh crore under the revised series.
Ananth has pointed out that GDP estimates for FY2022–23, FY2023–24, FY2024–25 and FY2025–26 were recalculated after the decision to adopt 2022–23 as the new base year. The revised first-quarter estimate for FY2025–26 is therefore used as the comparable base for calculating first-quarter growth in FY2026–27.
Economist and National Institute of Public Finance and Policy professor Pinaki Chakraborty has also said that such changes are a normal feature of GDP rebasing. According to him, estimates for the corresponding period of the previous year can decline when a new base year is introduced, as has happened during earlier revisions as well.
India generally revises its GDP base year periodically to reflect changes in the economy’s structure. The latest revision incorporates changes in the availability and quality of data used to estimate economic activity.
The new methodology also changes some of the underlying data sources. According to the Ministry of Statistics and Programme Implementation, data from regular statutory surveys will now capture the activity of smaller enterprises and household businesses, replacing some estimates previously based on surveys conducted at longer intervals.
The Department of Statistics made the methodology and proposed changes for the new GDP series public in February. The revision therefore involved recalculating the historical series rather than changing only the latest quarter.
Saurabh Garg, Secretary, Ministry of Statistics and Programme Implementation, has said that year-on-year comparisons of quarterly GDP are made at constant prices. If a new base year is introduced during the current financial year, the corresponding quarter of the previous year is recalculated using the new base year to keep the comparison consistent.
GDP in India is estimated through two broad approaches. One measures the value generated through production across the economy, while the other measures expenditure by households, businesses and the government. In theory, the two approaches should produce the same result, although differences can arise because expenditure data may be incomplete or become available later.
The central issue in the current debate, therefore, is how to interpret the revised historical estimates. A change in the previous-year estimate following a base-year revision does not, by itself, indicate that the earlier figure was deliberately altered to raise the latest growth rate.
