SBI Research has provided detailed insights into the ₹42 lakh crore GDP revision in India's new national accounts series, explaining that the changes reflect methodological improvements rather than unexplained adjustments. According to SBI Research's latest Ecowrap, India has recorded 239 GDP revisions across 70 quarters since FY09, with 134 revisions being upward and 105 downward, showing no consistent direction across different periods. The report highlights that between Q1 FY23 and Q2 FY26, nominal GDP was revised downward by ₹41.8 lakh crore while real GDP was revised upward by ₹372 lakh crore, emphasizing that these changes need to be viewed together rather than in isolation. At the sectoral level, around ₹39 lakh crore of the downward GVA revision was concentrated in trade, hotels, transport and communication, while a ₹13.6 lakh crore upward revision was seen in financial, insurance, real estate and business services.
Pronab Sen, the first chief statistician of India, has raised significant concerns about the methodology of the new GDP series in a recent interview with Businessline. According to Sen, the controversy hinges on the massive 7% drop in Q1 FY26 GDP from ₹86.05 lakh crore to ₹80 lakh crore, which he describes as a ₹6 lakh crore revision on a base of ₹80 lakh crore. Sen questions the double deflation approach used in the latest GDP calculations, stating it is "much more data-demanding" than single deflation. The former chief statistician expressed uncertainty about whether the Ministry of Statistics and Programme Implementation (Mospi) has sufficient input price data to support the new methodology, particularly for the Output Producer Price Index (PPI) which is currently at an experimental stage.
Sen highlighted critical transparency gaps in the new GDP series implementation, questioning why "the sources and methods" have not been released. As reported by Businessline, he noted that "they didn't actually open up and elaborate on the price switching until Subhash brought it up" - creating what he describes as "bad optics" that has led to charges of fudging. The former chief statistician emphasized the importance of releasing detailed data for researchers to reconstruct GDP calculations, stating that "the CPI data was released in the full breakdown" during his time at Mospi but this practice has since been discontinued. Sen suggested that "the Supply and Use Table (SUT) should not have been discontinued but should have been expanded" to provide researchers with the necessary data for GDP reconstruction.
According to Businessline, Sen raised concerns about the collection of Producer Price Index data, noting that "companies frequently refuse to disclose transaction prices due to varying tier-based pricing structures and competitive sensitivity". The former chief statistician questioned whether Indian companies have become more cooperative in providing this essential data, particularly given the complexity of collecting prices from producers who sell to different distributors at varying rates. Sen suggested that "the good practice is that when you're introducing a completely new dataset, you should run the two datasets in parallel" to allow for proper comparison and transparency. He noted that "PPI is theoretically superior because it measures prices at the first point of sale, but reliability remains uncertain because sampling methods and cross-verification mechanisms for PPI are not fully transparent".
The latest GDP data has generated significant controversy, with Sen questioning the 7.8% GDP growth in Q1 2026-27 and the sharp downward revision of Q1 2025-26 nominal GDP. As reported by Businessline, Sen's personal hypothesis suggests the 10% nominal growth figure may be correct, with his primary concern centered on the price deflators that determine real GDP growth. The controversy has been further complicated by the 9.2% real manufacturing growth where the deflator has become negative at -1.5%, which Sen noted can occur with double deflation but appears suspicious given the context of other economic indicators. Despite methodology concerns, recent economic data suggests the 7.8% GDP growth may have some validity when compared with other economic indicators, with SBI Research noting that high-frequency indicators and investment data are broadly consistent with strong economic activity.
