Sanjeev Sanyal, a prominent member of the Prime Minister's Economic Advisory Council, has robustly defended India's impressive 7.8% GDP growth rate recorded in the first quarter of the 2026-27 fiscal year. Sanyal dismissed accusations of "statistical gymnastics," asserting that no serious economist would question the credibility of the data.
Aligning with International Standards
Speaking to India Today TV, Sanyal emphasized that India's GDP methodology has been updated in direct response to recommendations from the International Monetary Fund (IMF) and other global institutions. He stated, "I don't think anybody should complain. We did exactly what the IMF and others were asking us to do."
The 7.8% growth rate for Q1 2026-27 surpassed both market expectations and the Reserve Bank of India's (RBI) forecast of 7%. It also marked a significant increase from the 6.9% recorded in the same quarter of the previous year.
The Base Year Update Explained
Sanyal clarified that the delay in updating India's GDP base year was due to the COVID-19 pandemic. Typically, the base year is revised at the start of each decade. However, the early 2020s were atypical due to the pandemic, necessitating a wait until 2024 for a more stable economic year to serve as the new baseline.
"We did have a problem with methodology till last year because the base year had not been updated... We had to wait till 2024 before we got a typical year that we could use as a base year. Now, once we got that, we of course updated the base year," Sanyal explained.
He further noted that updating the base year involves removing older, declining sectors from the economic basket and incorporating newer, higher-growth sectors. This natural re-calibration, Sanyal warned, would inevitably lead to a more favorable GDP growth rate, a consequence he had flagged in advance.
External Indicators Corroborate Growth
Beyond the official GDP figures, Sanyal pointed to other economic indicators that underscore the economy's underlying strength. He cited strong car sales numbers and decent corporate profitability, emphasizing that these are not government-derived statistics. "The GDP is very visibly strong, and it's showing through incidentally in other areas as well," he added.
While acknowledging that the growth rate might temper in subsequent quarters, Sanyal expressed confidence that India would still achieve a "very decent GDP growth rate print for the year as a whole." The RBI projects India's economy to grow by 6.7% for the full 2026-27 fiscal year.
Congress Questions Data Credibility
Despite the robust defense, the Congress party has raised questions about the credibility of the 7.8% GDP figures. Congress general secretary Jairam Ramesh labeled the number a "Greatly Distorted Picture," arguing that it fails to reflect weak private investment sentiment, sluggish consumer confidence, rising prices of essential goods, persistent unemployment, and a continuing trade deficit with China.