World Bank Executive Director and Axis Bank Chief Economist Neelkanth Mishra has vehemently dismissed recent assertions that India's actual GDP growth rate is a mere 2.6%, rather than the officially reported 7.8%. Mishra labeled such claims as “ill-educated and egregiously wrong,” expressing his shock at their circulation.
The controversy arose after former finance secretary Subhash Garg suggested that a downward revision of the current prices GDP base from ₹86 lakh crore to ₹80 lakh crore led to an inflated growth figure, implying it would have been only 2.6% otherwise. Mishra, however, clarified that the new methodology, which significantly improved data estimation, was introduced in February, and the downward revision of the base was publicly known in March.
Robust Economic Indicators Support 7.8% Growth
Mishra highlighted that the new series enhances the credibility of real output estimates, making it difficult to manipulate indicators. He pointed to several robust economic activities:
- Personal vehicle dispatches surged by 35%.
- Two-wheeler growth exceeded 20%.
- Commercial vehicle dispatches climbed over 40%.
- Tax collection growth showed a strong uptick.
- Credit growth is on an upward trajectory.
- Construction indicators remain robust.
These figures, according to Mishra, provide clear evidence of investments, which should alleviate concerns about weak private sector investment. He acknowledged that some slack remains in the economy but anticipates several quarters of above-trend growth for full recovery.
Wider Economic Consensus
Mishra's stance is echoed by other prominent economists. Prof. Krishnamurthy V. Subramanian, for instance, criticized Garg's statements as a “hilarious demonstration of economic ignorance.” Sanjeev Sanyal, a member of the Prime Minister's Economic Advisory Council, stated that no “serious economist” questions the credibility of the data.
A research note from SBI Ecowrap also weighed in, attributing the controversy to an “unnecessary” and incorrect interpretation of the revised GDP data, calling the approach “completely unsolicited” and a “sure sign of intellectual dishonesty.” With fiscal headwinds fading and monetary conditions becoming more supportive, Mishra expects GDP growth to continue surprising on the upside, potentially pushing consensus trend-growth estimates beyond 7%.