SBI Research on Wednesday pushed back sharply against critics of India's official GDP growth numbers, arguing that attempts to derive a nominal growth rate of around 2.6 per cent are statistically flawed because they compare figures drawn from two different base-year series. The report defended the National Statistical Office (NSO)'s revised data, affirming that India's economy expanded a stronger-than-expected 7.8 per cent in real terms and 10.3 per cent in nominal terms in the first quarter of FY27.

The Controversy at a Glance

The debate was triggered by the NSO's latest GDP release under the revised 2022-23 base year, which lowered the nominal GDP estimate for Q1 FY26 to approximately ₹80 lakh crore — down from the earlier estimate of ₹86.1 lakh crore under the previous base. Some commentators then compared the latest Q1 FY27 figure against the older, higher Q1 FY26 estimate, arriving at a nominal growth figure of around 2.6 per cent — a calculation that SBI Research termed fallacious.

This is not the first time a base-year revision has generated political and analytical controversy in India. Similar debates erupted during the shift to the 2011-12 base year, when revised estimates altered the trajectory of growth figures across multiple quarters.

What SBI Research Actually Found

According to the report, a like-for-like comparison — using the revised base year for both quarters — yields nominal growth of nearly 9.7 per cent, broadly consistent with the official estimate of 10.3 per cent. Even under this alternative calculation, implied real GDP growth would be approximately 7.4 per cent, the report noted.

SBI Research further rejected claims that the base-year revision was designed to artificially inflate India's economic size. On the contrary, the report pointed out that the revision has actually resulted in a lower nominal GDP estimate compared with the earlier series — undermining the inflation argument entirely.

Why Revisions Are Normal

SBI Research emphasised that GDP revisions are a standard feature of national accounts compilation globally, occurring in both directions as more comprehensive data become available. The Q1 FY27 figures released now, the report noted, will only be finalised by February 2029 after multiple rounds of revisions incorporating additional information.

The base-year alignment, the report explained, was undertaken to improve consistency between price indicators, production measures, and GDP deflators, while also enhancing transparency by incorporating revised historical data alongside the latest quarterly estimates.

Implications for India's Economic Narrative

The 7.8 per cent real growth figure for Q1 FY27 came in ahead of most forecasts and, if sustained, would keep India on track as one of the world's fastest-growing major economies. Critics argue, however, that the methodological debate itself — regardless of who is right — risks undermining public confidence in official statistics at a time when data credibility is under scrutiny globally.

The NSO has not issued a separate clarification in response to the criticism, and the debate is expected to continue as more quarterly data under the new base year become available.