5 min readSep 3, 2026 07:13 PM IST
First published on: Sep 3, 2026 at 06:20 AM IST
India’s first-quarter GDP numbers have been caught in a crossfire, with a slugfest of unending salvos between die-hard supporters and opponents on issues such as the interpretation of the base year. Globally, GDP revisions typically occur for two major reasons: Periodic baseline changes to reflect modern economic structures, and retrospective data updates after economic events. While developed economies generally experience minor routine adjustments, emerging markets frequently witness dramatic revisions due to the inclusion of informal or rapidly expanding techno-digital sectors and ever-changing consumer preferences.
While the Ministry of Statistics and Programme Implementation (MoSPI) has come out with its set of explanations, we provide some more food for thought for settling this issue.
Last year, when the NSO had released the first quarter FY26 GDP numbers (base: 2011-12), the nominal GDP for the quarter was Rs 86.1 lakh crore. In the latest release (base: 2022-23), the Q1 FY26 GDP number has been revised downwards to Rs 80 lakh crore. Alongside, the latest Q1 FY27 GDP number is at Rs 88.3 lakh crore.
Some are now ascribing a 2.6 per cent growth in nominal GDP for the latest quarter instead of 10.3 per cent by calculating the yearly growth rate using Rs 88.3 lakh crore (we call it series A for the sake of clarity) over Rs 86.1 lakh crore (we call it series C). This is a sign of intellectual dishonesty.
If anyone truly wants to compare current nominal GDP numbers over the previous unrevised base of the first quarter of last year, then Rs 88.3 lakh crore (new base, series A released in August) should be estimated over Rs 80.4 lakh crore (new base, released in June), which comes out to 9.7 per cent growth (as against 10.3 per cent). Hypothetically, even with this nominal growth (by adjusting the deflator), the real growth for Q1 FY27 would be 7.4 per cent (as against the released 7.8 per cent), still good enough in view of the exogenous challenges during the quarter.
Comparisons need to be made on the same base, using the same method. The 2.6 per cent number being touted is neither the official real growth rate nor a like-for-like comparison. It is a hybrid comparison between a current-year level of the new-series with an old-series previous-year level. That may make for a dramatic talking point, but it does not provide a meaningful growth rate for a reality check. Another situation may arise when instead of being revised downwards, the numbers are revised upwards.
But why did this unwarranted confusion arise this time?
Every year, MOSPI revises its previous year’s GDP estimates, reconciling them against the corresponding annual revised estimates. These revisions are released in February. In the current year (this time on August 31), the National Accounts Statistics has also incorporated revised numbers of previous years in the quarterly data itself for the sake of more transparency to align with the base revisions carried out in CPI, IIP, WPI and PPI. This is perfectly legitimate. This base alignment ensures that the GDP deflators and volume estimates remain consistent with the updated price and production indices.
The reported Q1 FY27 growth number does not stand alone. The composition gives it credibility. Real GVA grew 8.2 per cent, which is a cleaner reading of underlying activity. GST collection till August was at Rs 10.42 lakh crore, up 11 per cent (Q1 FY27 up 8.6 per cent). Domestic passenger vehicle sales were up 25.6 per cent, tractor sales 19 per cent, IIP 6.2 per cent, steel output 4.8 per cent, cement 8.8 per cent, and exports 17 per cent till July. Net FDI for Q1 FY27 was at $7.8 billion as compared to $4.75 billion last year. These are surely not signs of an economy expanding at only 2.6 per cent.
The World Bank notes that countries revise national accounts to improve accuracy and comparability, and that larger revisions may be needed when new methodologies or a new reference year for constant-price series are introduced. It also cautions that rebasing can create breaks unless historical data are consistently linked. For example, the latest Q1 FY27 number will only be finalised by February 2029. Base revisions add an extra layer to this complicated process. Interestingly, the base year revision this time has reduced the size of the GDP. Thus, the argument of GDP getting bigger because of base year revisions is meaningless.
The writer is member, PM Economic Advisory Council, member, 16th Finance Commission and group chief economic adviser, SBI. Views are personal
The reported Q1 FY27 growth number does not stand alone. The composition gives it credibility. 
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