A few months ago, US President Trump called India a “dead economy”. But the second-quarter (Q2FY26) GDP growth of 8.2 per cent only underscores how ignorant his remarks were. However, even as we celebrate India’s economic growth, the IMF has handed a “C” grade to the national accounts that underpin this claim. In its staff report on India on November 26, the Fund uses characteristically diplomatic language to note, “The data provided to the Fund have some shortcomings but are broadly adequate for surveillance.”
That should make us pause. If there are shortcomings in the data, we need to be more transparent to earn global trust in the final GDP numbers. That is also important, as global investors make their investment decisions based on the credibility of information about the economy’s performance, as well as political stability. Such transparency is also important to silence domestic critics who try to paint a negative picture of the country’s economy.
Two questions are important when we look at India’s growth story beyond GDP numbers. First, is this growth creating enough productive jobs in the formal sector? And second, how green is this growth? Let us dig a little deeper for answers to these critical questions.
On the jobs front, the picture is less comforting. Nearly 46 per cent of the workforce remains engaged in agriculture (PLFS, 2023-24), and this sector has grown by just 3.5 per cent in Q2FY26. That’s not enough to support any meaningful structural transformation, and the potential revolution in manufacturing cannot take place without mass demand from rural areas. For years, about 90 per cent of India’s economy has remained informal, and this is precisely where the IMF’s comment on the poor quality of data is anchored.
To be fair, the IMF’s broader view is not uniformly negative. India still receives a median ‘B’ in the overall Data Adequacy Assessment. The friction lies in the quality of data used for the National Accounts. The Fund has flagged that India’s GDP calculations continue to rely on a 2011-12 base year, now more than 13 years old, when global best practice is to update the base every five years to capture structural change. The deeper concern, however, is the persistent underestimation of the informal sector, which remains largely unregistered and outside formal statistical systems. As a result, it is chronically undercounted, leading to mismeasurement of GDP levels and economic growth, as well as employment trends and welfare outcomes.
Election promises to create jobs, especially “government jobs”, remain largely unfulfilled. Even handouts, be it the Rs 10,000 transfer to 1.5 crore Jeevika Didis in Bihar under the Mukhyamantri Mahila Rojgar Yojana or the promise of jobs for the youth, should make us pause and raise questions. Are these schemes fiscally sustainable? What kind of jobs will they actually create? What we need is for people to move out of the farm sector — it is clearly not growing at high rates — into the formal, organised sectors that are expanding in line with overall GDP growth and where data is better captured and is credible. Only then can India earn global trust in its GDP growth numbers.
Our second question is: How green is our growth? On one hand, Prime Minister Narendra Modi articulates an ambitious green vision. On the other hand, IQAir, a Swiss-based air quality technology firm, ranks Delhi as the second most polluted city at this very moment. Data from AQI.in goes further — 45 of the top 50 most polluted cities globally are in India, with Delhi occupying the top spot. North India is choking, and the situation is nothing short of a gas chamber with AQI going above 400. This may lead to a brisk sale of air purifiers, pushing up the GDP growth numbers. But is this the type of GDP we want, when people can’t even breathe fresh and safe air? The Air Quality Life Index (AQLI) 2025 report by the Energy Policy Institute at the University of Chicago (EPIC) underscores the severity of the crisis: Delhi-NCR is the worst affected, with residents facing an estimated loss of 8.2 years in life expectancy based on WHO standards.
Not just air, but Delhi’s groundwater is also polluted — it suffers from heavy metal contamination. The Central Ground Water Board’s annual report shows that Delhi has India’s highest levels of uranium, lead, nitrate, fluoride and salinity-related indicators, posing serious long-term health risks for those relying on borewells and hand pumps.
All this brings us back to a simple but crucial point: Headline numbers may shine, but having meaningful growth requires getting the fundamentals right. The first task is to generate productive, formal-sector jobs. It requires accelerating private investment, improving ease of doing business, and aligning skilling programmes with actual labour-market demand. Second, India must modernise its statistics architecture, update the GDP base year, institutionalise high-frequency economic data, and strengthen national accounts to reflect the true economy. Third, environmental sustainability can no longer remain an afterthought. Tackling air pollution calls for coordinated action across north Indian states on crop residue management, urban transport, clean energy, and industrial emissions, backed by credible monitoring systems. This has to be done at the highest level in the Prime Minister’s Office.
In short, get jobs right, get the data right, and clean up air and water. Do this, and India’s growth story will shine. Anything less is more noise.
Gulati is Distinguished Professor and Chanda is a Research Assistant at ICRIER. Views are personal
get jobs right, get the data right, and clean up air and water. Do this, and India’s growth story will shine. Anything less is more noise. 
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