India Posts 7.8% Q1 GDP Growth as Export, Stimulus Boost Fuels Credibility Fight

Q: If India's economy is officially smaller under the new statistical rules, how did the growth rate still manage to hit 7.8%?

India’s economy did not “grow to 7.8% because last year’s GDP was cut.” The reported 7.8% came from comparing output within the same newly rebased GDP series, not by mixing old and new datasets. What changed was the statistical yardstick. India shifted its GDP base year from 2011-12 to 2022-23 and rebuilt the series using newer data sources, broader coverage and revised methods. That lowered the estimated size of some past quarters, including Q1 FY26, from ₹86.05 lakh crore in the old series to about ₹80 lakh crore in the new one. But that does not mean the economy suddenly shrank in reality; it means the measurement system changed. The 7.8% figure is real GDP growth, measured at constant prices. Under the revised series, real GDP for Q1 FY27 was estimated at ₹81.36 lakh crore, up from ₹75.46 lakh crore in Q1 FY26. That year-on-year increase yields 7.8%. Nominal GDP under the same revised series rose from about ₹80 lakh crore to ₹88.27 lakh crore, implying roughly 10% growth. Critics’ lower 2.6% estimate came from comparing ₹88.27 lakh crore under the new series with ₹86.05 lakh crore from the old series. Statisticians and the government say that is methodologically wrong because the two numbers are built on different base years and different estimation methods. So the economy can look smaller under revised rules while still posting strong growth, because growth is calculated from a re-estimated past base within the same updated framework.

3 articles · Updated · BBC.com · Sep 3

India’s economy grew 7.8% in the first quarter, beating forecasts and giving Prime Minister Narendra Modi a political lift even as the data triggered a fresh dispute over whether growth was overstated.
A 12% export jump, nearly 12% growth in gross fixed capital formation, tax cuts, lower rates and diversified energy imports helped India ride out the Middle East oil shock despite heavy crude dependence.
Critics say revised GDP methodology and a lower year-earlier base inflated the headline figure; the government and some outside economists counter that the new series improves data quality rather than distorting it.
The upbeat print has not erased doubts about uneven growth, with weak job creation, soft foreign investment and muted stock-market reaction undercutting the headline strength.
Risks are building as fiscal support fades, rainfall runs 13% below normal, food prices rise and inflation hit 3.9% in May, prompting expectations of higher borrowing costs and slower growth ahead.