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There is a peculiar ritual that plays out every time India’s economy performs well. First comes the news: growth of 7.8 per cent in the April to June quarter of this financial year, the fastest expansion recorded by any large economy in the world for that period. Then, within days, comes the counter-narrative from the Indian National Congress: the number is false, the arithmetic is rigged, and the real story is one of stagnation dressed up as success.
This jump was based on a gross misstatement by a former finance secretary, who in all respect expected to know the truth about his agenda driven statement. The Congress did not stop here but, the party’s General Secretary for Communications has gone further than usual, issuing a three-page statement that claims real growth is “basically zero” and that the Government owes the country an explanation for what it calls a 43 lakh crore rupee disappearance from the size of the Indian economy.
It is worth taking this claim seriously enough to examine it line by line, because that is precisely what its authors did not do. When one does, the entire edifice collapses under the weight of a single, elementary statistical error, repeated with great confidence and even greater carelessness.
The Ministry of Statistics and Programme Implementation released a new GDP series in February 2026, based on 2022-23 as the base year, replacing the outdated 2011-12 series. This is a routine and necessary exercise that every economy undertakes periodically to reflect current patterns of production and consumption. Under the new series, India’s nominal GDP for the first quarter of the previous financial year, 2025-26, was estimated at approximately 80 lakh crore rupees. Under the old series, the same quarter had been estimated at around 86 lakh crore rupees.
The misguided ex beaurocrate’s calculation takes the old series figure of 86 lakh crore rupees for last year and divided it into this year’s new series figure of 88.27 lakh crore rupees. That division produces a nominal growth rate of only 2.6 per cent, from which the gentleman then subtracts inflation to arrive at its dramatic conclusion of near zero growth. The trouble is that this calculation compares two numbers that were never meant to be compared. One is drawn from a series that has been discontinued. The other is drawn from a series with different coverage, different data sources and a different base year. Dividing one by the other does not produce a growth rate. It produces nonsense dressed in decimal points.
The correct comparison, using the new series on both sides, is straightforward. Nominal GDP rose from 80 lakh crore rupees to 88.27 lakh crore rupees, a nominal growth of 10.3 per cent. At constant prices, real GDP rose from 75.46 lakh crore rupees to 81.36 lakh crore rupees, which is real growth of 7.8 per cent, exactly the figure the Government announced and exactly the figure that has now been disputed on the basis of an invalid calculation. Congress Party endorsed the flawed comparison to suite its agenda. That a technocrat of his experience did not catch such a basic error, or chose not to, says a great deal about the intent behind this exercise. Leave aside the individual, but the conspiracy that requires travelling backwards in time.
The most serious accusation in the Congress statement is that the Government secretly and suddenly reduced last year’s GDP figure in order to inflate this year’s growth number. This charge collapses the moment one lays out the actual sequence of events. The old series figure of 86.05 lakh crore rupees for the April to June quarter of 2025-26 was released in August 2025. The new series, with its revised figure of 80.32 lakh crore rupees for the same quarter, was released in February 2026, a full six months before the April to June 2026 GDP estimate was ever calculated.
A further, minor revision brought the figure to 80.00 lakh crore rupees by the end of August this year, a movement of barely 0.32 lakh crore rupees. For the conspiracy theory to hold, the Government would have needed to know, in February, precisely what growth rate it wanted to show in September, and to have engineered the base accordingly, months before the current quarter’s economic activity had even taken place. This is not how national accounting works, and it is not how time works either.
The overwhelming majority of the difference between the old and new figures arose from a comprehensive, well documented methodological rebasing exercise conducted half a year before the number that is supposedly being manipulated even existed. Rebasing did not begin in 2026.
India has revised its GDP base year nine times since Independence. And this revision is done every 5/6 years intervals. Five of those revisions took place while the Congress party itself governed at the Centre, under Jawaharlal Nehru in 1956, Indira Gandhi in 1967, Rajiv Gandhi in 1988, and twice under the United Progressive Alliance government in 2006 and 2010.
In fact, when the 2011-12 base series was introduced in 2015, the growth estimate for the UPA’s final year in office, 2013-14, was revised upward from 4.7 per cent to 6.9 per cent, a far larger swing than anything being debated today. If the current Government’s alleged motive is to inflate its own record at the expense of historical accuracy, it has a strange way of going about it, since the same revision exercise that Congress now calls fraudulent actually improved the recorded performance of the UPA years. Rebasing is neither new nor partisan.
Congress arrives at its headline figure of 43 lakh crore rupees by adding together the differences between old and new series estimates across four separate years. This is statistical theatre rather than serious analysis. GDP is not a fixed, discoverable quantity waiting to be measured with perfect accuracy once and for all. It is an estimate, built from surveys, administrative records, and sampling methods, and it is revised as better data becomes available.
The new series incorporates far more granular information than before, including GST returns, vehicle registration data, updated labour force surveys, improved treatment of unincorporated enterprises, and the adoption of double deflation in manufacturing, a method the International Monetary Fund had itself urged India to adopt.
None of this amounts to erasing 43 lakh crore rupees worth of goods and services that once existed. It reflects a more accurate accounting method being applied retrospectively, which is precisely what good statistical practice demands. It is also worth noting that a lower nominal GDP base mechanically pushes up ratios such as fiscal deficit to GDP and public debt to GDP, both of which are politically sensitive figures the Government would have every incentive to keep looking favourable if manipulation were truly the goal. Instead, annual real growth rates under the new series were revised only modestly, from 7.2 to 7.3 per cent for 2023-24, from 7.1 to 7.2 per cent for 2024-25, and from 7.7 to 7.8 per cent for 2025-26. These are not the fingerprints of a rigged system. They are the fingerprints of a routine statistical upgrade.
The statement also argues that since retail and wholesale inflation ran higher than the GDP deflator, the deflator itself must be wrong, and that using a more realistic inflation figure would bring growth down to somewhere between four and six per cent. This argument rests on a basic misunderstanding of what these different price indices measure. Retail inflation captures the prices households pay for a specific consumption basket. Wholesale inflation captures prices of goods and raw materials at the factory gate, and largely excludes services.
The GDP deflator, by contrast, must capture price movements across the entire economy, including investment, government spending, exports, construction, financial services, and information technology, sectors that a household inflation basket simply does not touch. MoSPI uses more than three hundred individual price deflators to construct this figure. A single household’s grocery bill cannot substitute for that exercise, however emotionally persuasive the comparison may sound on a podium.
The related claim that a negative deflator in manufacturing proves manipulation similarly misstating the method now in use. Under double deflation, output and inputs are each deflated separately using their own price indices, and real value added is calculated as the difference between the two. When input costs rise faster than output prices, the resulting implicit deflator can turn negative even as both output and input prices are rising in absolute terms. This is a known and accepted feature of the method, not evidence of wrongdoing. Ironically, it was the IMF that criticised India’s earlier reliance on the simpler single deflation approach. The new series adopted the more rigorous method the IMF recommended, and is now being condemned for the very improvement that was demanded of it.
The statement leans heavily on the IMF’s 2025 assessment, which gave India’s national accounts a grade of C, without mentioning what that assessment actually said. The IMF’s concerns were specific: an outdated base year, insufficient use of producer price indices, excessive reliance on single deflation, and discrepancies between production and expenditure based estimates.
The new series addresses precisely these concerns. It updates the base year, incorporates new producer price indices, adopts double deflation, and works toward integrating supply and use tables to reduce discrepancies. To cite the IMF’s criticism of the old system while attacking the Government for fixing that very system is not analysis. It is selective quotation in service of a predetermined conclusion.
The same applies to the claim about manufacturing activity. The statement cites the Purchasing Managers’ Index touching a five year low in August, without mentioning that the actual reading was 52.8, comfortably above the 50 mark that separates expansion from contraction. Slower expansion is not the same as the 5.2 per cent contraction the statement alleges elsewhere, and in any case August falls outside the April to June quarter under discussion. A survey conducted after the quarter ended cannot retroactively erase economic activity that has already been measured and recorded.
Beyond the arithmetic, it is worth asking what independent, high frequency indicators tell us about the state of the economy, since these are far harder to argue with than a contested statistical series. Domestic passenger vehicle sales in July rose 34.3 per cent year on year, the strongest July on record. Tractor sales rose 28.1 per cent, two wheeler retail sales rose 28.3 per cent, and total vehicle registrations rose 25.9 per cent, with every major category posting its best July ever.
GST collections grew 15.4 per cent, digital payment volumes grew 16.6 per cent, and bank credit expanded at its fastest pace in over a decade, with public sector banks posting their highest ever annual net profit and their lowest ever bad loan ratio.
Manufacturing output grew 7.3 per cent in July, with nineteen of twenty three industry groups expanding. Merchandise exports touched a record 44.24 billion dollars for the month. Foreign direct investment inflows in the April to June quarter reached their strongest level in at least fifteen years, and foreign exchange reserves touched a record 729 billion dollars in August.
Retail inflation, meanwhile, remained contained at 4.45 per cent, comfortably within the tolerance band. None of these numbers come from a press release issued by the ruling party. They come from GST records, vehicle registration data, banking regulators, and trade statistics, and they all point in the same direction: an economy that is expanding, not one limping along at close to zero growth as the Congress statement would have the country believe.
It would be easy to treat this episode as an isolated dispute over methodology, but it fits a familiar pattern. When India’s growth has disappointed in the past, the Congress party has cited it as proof of governmental failure. When India’s growth outperforms expectations, as it has now, the party searches for a technical objection to dismiss it. Genuine scrutiny of economic data is healthy for democracy and should be welcomed. But scrutiny built on comparing incompatible statistical series, quoting half a sentence of an IMF report, and mistaking a household grocery bill for a national price index is not scrutiny. It is a script written in advance, in search of any set of numbers that might fit it.
India does not need to be defensive about a growth rate that places it well ahead of the United States, China, the United Kingdom, Japan and every other major economy for the same quarter. It needs an Opposition capable of engaging with that success honestly, questioning where genuine gaps remain, in employment quality, in regional disparities, in the pace of manufacturing job creation and proposing real alternatives. The country’s growth story is being written in GST returns, export data, vehicle registrations and bank balance sheets, not in an arithmetic error.
