NEW DELHI – A recent report by SBI Ecowrap has strongly defended India's robust 7.8% Gross Domestic Product (GDP) growth rate for Q1 FY27, criticizing what it calls an "unnecessary controversy" stemming from misinterpretations of revised economic data.
The controversy emerged following the release of Q1 FY27 GDP figures, particularly concerning revisions to previous year's GDP data after a change in the GDP base year from 2011-12 to 2022-23. The National Statistical Office (NSO) had revised Q1 FY26 nominal GDP downwards from an initial ₹86.1 lakh crore to ₹80.0 lakh crore in the latest release, while Q1 FY27 nominal GDP stood at ₹88.3 lakh crore.
Misinterpretation of Data Fuels Debate
The SBI Ecowrap report highlighted that some critics, including former finance secretary Subhash Garg, incorrectly calculated nominal growth at a mere 2.6%. This was done by comparing the latest Q1 FY27 figure (₹88.3 lakh crore) with the earlier, unrevised Q1 FY26 figure (₹86.1 lakh crore), rather than using the revised base for comparison.
Garg had stated in an interview that if the previous year's GDP had not been revised down by ₹6 lakh crore, the growth in current prices would have been only 2.6%.
SBI Ecowrap Rejects Claims of 'Intellectual Dishonesty'
SBI Ecowrap labeled this comparative approach as "completely unsolicited" and a "sure sign of intellectual dishonesty." The report clarified that for a valid comparison, the Q1 FY27 nominal GDP (new base, A series) should be measured against the Q1 FY26 figure on the new base (B series), which would yield a 9.7% growth (as opposed to the official 10.3%). Even with this adjusted nominal growth, factoring in the deflator, real growth for Q1 FY27 would still be approximately 7.4%, which the report deemed "still good enough when looking at a wall of exogenous challenges."
Revisions Are Normal and Necessary
The report further underscored that GDP figures frequently undergo multiple revisions, a standard practice to align data with updated economic indicators such as the Consumer Price Index (CPI), Index of Industrial Production (IIP), Wholesale Price Index (WPI), and Producer Price Index (PPI). It noted that quarterly data on the old base between FY22 and FY25 saw 25 upward and 12 downward revisions, indicating that such adjustments can move in either direction.
Furthermore, SBI Ecowrap rejected claims that the base-year revision had artificially inflated nominal GDP, pointing out that the latest revision had, in fact, reduced it. The report also reminded that the Q1 FY27 estimate released in August 2026 would only be finalized by February 2029, emphasizing the iterative nature of economic data compilation.