State Bank of India has strongly rejected claims that India's nominal GDP growth in Q1 FY27 was only 2.6%, calling such calculations 'completely unsolicited and a sure sign of intellectual dishonesty'. The bank's response came after former finance secretary Subhash Chandra Garg questioned the government's reported 7.8% real GDP growth, arguing that nominal growth would have been around 2.6% if the previous year's current-price GDP had not been revised down from ₹86 lakh crore to ₹80 lakh crore. According to The Times of India, SBI Research emphasized that the 2.6% figure comes from comparing the latest ₹88.3 lakh crore estimate with the older ₹86.1 lakh crore figure for Q1 FY26, instead of using the revised number. The bank noted that some estimates are now ascribing 2.6% growth by calculating yearly growth rate using the new ₹88.3 lakh crore estimate over the old ₹86.1 lakh crore figure, which it described as 'completely unsolicited and a sure sign of intellectual dishonesty'. SBI's Group Chief Economic Adviser Soumya Kanti Ghosh explained that 'If anyone truly wants to compare current nominal GDP numbers over the previous unrevised base of Q1 GDP, then ₹88.3 lakh crore (new base, A series) should be estimated over ₹80.4 lakh crore (new base, B series), which comes out to 9.7% growth (as against 10.3%)'. Even with this adjusted comparison, Ghosh notes that hypothetically, the real growth for Q1 FY27 would be 7.4%.
The controversy centers on India's GDP base year revision from 2011-2012 to 2022-23 in February 2026, which led to significant changes in historical GDP data. As reported by The Times of India, under the old 2011-12 series, GDP was estimated at ₹86.05 lakh crore for Q1 FY26, while under the new 2022-23 series, it was initially estimated at ₹80.32 lakh crore, then revised to ₹80.44 lakh crore and subsequently to ₹80 lakh crore. SBI's Ghosh explains that the old ₹86.05 lakh crore figure cannot be directly compared with the latest Q1 FY27 estimate of ₹88.27 lakh crore because they belong to different GDP series. The government has rejected allegations that last year's GDP was reduced under the new series to make current year growth appear stronger, stating that revisions are due to a combination of factors including change in base year, improved methodologies, updated data sources and incorporation of newer indicators. Madan Sabnavis from Bank of Baroda notes that 'The new methodology of GDP and GVA computation is said to be more aligned to international practices', with economists arguing that 'the data cannot compare the old methodology based computation with the new methodology as there are several improvements made as per the new methodology aligning with global good practice'.
Stock market veteran Shankar Sharma has joined the GDP debate by questioning India's headline growth figures, arguing that the economy's 'Real Feel' growth is only 2-3%. Writing on X after India reported 7.8% GDP growth in Q1 FY27, Sharma said he was no longer interested in getting drawn into the GDP growth debate, instead preferring to look at what he calls 'Real Feel' GDP growth. Despite being a $4 trillion economy growing at around 7%, he noted that the quality of life appears to be deteriorating, with people looking stressed and traffic looking chaotic. Based on this measure, Sharma put India's 'Real Feel' GDP growth at just 2-3%, contrasting this with Europe where headline GDP growth is around 2-3% but appears very different on the ground. He pointed to organised and clean surroundings, buzzing cafes and restaurants, music on the streets and attractive villages as signs of stronger lived experience in Europe.
Union Commerce and Industry Minister Piyush Goyal launched a sharp defence of India's 7.8% GDP growth for the April-June 2026 quarter, directly targeting critics who question the data's credibility. Speaking to reporters in Delhi, Goyal accused Opposition leaders and former officials of attempting to mislead people by comparing growth figures from different GDP series. 'Truth cannot be hidden... Ministers do not manufacture this data... When you have such a negative mindset, in a way, you are diminishing yourself. When you attempt to demotivate people by distorting the truth, you betray the people,' Goyal said. The minister emphasized that 'Record growth of 7.8% is something that no other country has been able to replicate. This is the capability, hard work, and joint effort of 140 crore people in the country,' adding that the performance had helped India emerge as a 'global trusted partner.' Prime Minister Narendra Modi described the growth as a major achievement, stating that India had delivered the result despite shocks to oil prices, supply chain disruptions and uncertainty in the world economy. Goyal credited PM Modi's leadership for the milestone, saying 'PM Modi has led the country with farsightedness.'
The Ministry of Statistics and Programme Implementation (MoSPI) has provided detailed clarification on the manufacturing sector's negative 1.5% implicit GVA deflator despite rising output and input prices. As reported by Business Standard, under the double-deflation method, output and intermediate consumption are deflated separately to arrive at real GVA. 'In Q1, 2026-27 manufacturing GVA is compiled using the double-deflation approach, under which output and intermediate consumption are separately deflated. During this period input prices increased faster relative to output prices. As a result, nominal GVA growth for this sector was relatively lower at 7.7 per cent, while real GVA growth was 9.2 per cent. The resulting difference between nominal and real GVA growth produced a negative implicit GVA deflator of 1.5 per cent,' MoSPI explained. The ministry cited textiles and cotton ginning, basic metals, and rubber and plastic products among activities where input-price growth exceeded output-price growth. Former acting chairman of the National Statistical Commission (NSC) P.C. Mohanan noted that 'a negative GVA deflator is likely to happen while using double deflation' and questioned the methodology clarity, while Madan Sabnavis from Bank of Baroda supported the clarification, citing corporate results showing companies absorbed higher input costs without passing them to consumers. Ranen Banerjee of PwC explains that 'We all are aware that there was a spike in input prices owing to the Middle East conflict. We are also aware that companies have been reluctant to pass on the entire cost increases to consumers and there has been only a partial pass on and that too mostly after the first quarter.'
Former Reserve Bank of India governor Raghuram Rajan has publicly questioned the authenticity of the GDP data, telling news agency PTI: 'Are these growth numbers real? Even the larger economy is in doubt if the growth numbers aren't real. There are some discrepancies which one has to worry about.' He added: 'If we're growing so fast, why aren't we creating more jobs, more good jobs? And why is investment not taking place?' Former finance secretary Subhash Chandra Garg has raised specific concerns about the methodology, stating that 'GDP growth in the first quarter was also 7.8% last year, and the same is being reported for this year. However, last year's GDP numbers were later revised down to 6.9%. Based on the revised data, this year's first-quarter growth rate appears higher. But that is not the whole story.' His main argument centers on nominal GDP at prevailing prices, explaining that 'Inflation has been removed from the GDP number, which is 7.8%. The GDP is actually calculated at prevailing prices, the prices that you and I pay and that companies charge.' He referenced the ₹6 trillion downward revision to last year's nominal GDP from ₹86 trillion to ₹80 trillion, noting that with current-year output at about ₹88 trillion, that produces growth of roughly 10.3% on the revised base. Congress President Mallikarjun Kharge questioned the strength of the economy, stating that 'Unemployment is at a 50-year high. Forty per cent of young graduates are unemployed. In July 2026, one in every six Indians aged 15 to 29 is unemployed.' He also criticized retail inflation at a 19-month high and rising prices of essential items. Goyal took a sharper swipe at critics, saying 'A few jobless people call themselves economists and appear on TV channels to harm the country. Do not fall for this.'
