SBI Research: Comparing GDP series to dispute 7.8% growth is fallacious
Synopsis
SBI Research has called out a statistical sleight of hand: the widely cited claim that India's nominal GDP grew just 2.6% in Q1 FY27 mixes figures from two incompatible base-year series. Using a consistent revised base, nominal growth is closer to 9.7% — and real growth holds at 7.4–7.8%. The methodological row matters because it goes to the heart of how India's growth story is read at home and abroad.
Key Takeaways
SBI Research termed the 2.6 per cent nominal GDP growth figure fallacious, saying it compares data from two different base-year series.
India's economy grew 7.8 per cent in real terms and 10.3 per cent in nominal terms in Q1 FY27 , according to official estimates.
The NSO 's revised 2022-23 base year lowered the Q1 FY26 nominal GDP estimate to ₹80 lakh crore from the earlier ₹86.1 lakh crore .
A like-for-like comparison using the revised base yields nominal growth of nearly 9.7 per cent and implied real growth of around 7.4 per cent .
SBI Research noted the base revision actually produced a lower nominal GDP — contradicting claims it was used to inflate economic size.
The Q1 FY27 figures will only be finalised by February 2029 after multiple revision rounds.
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.
Point of View
And the 2.6% figure does not survive scrutiny on a like-for-like basis. But the report does not fully address why the NSO's revision produced such a large downward shift in the Q1 FY26 nominal estimate — from ₹86.1 lakh crore to ₹80 lakh crore — and that gap is where public scepticism is rooted. Defending the arithmetic is necessary but not sufficient; what India's statistical institutions need is a plain-language public communication strategy that explains revisions in real time, not after critics have already set the narrative. The credibility of GDP data is a public good, and it erodes faster than it is rebuilt.
NationPress
2 Sept 2026
Frequently Asked Questions
Why is India's GDP growth figure being disputed?
The dispute arose after the NSO revised India's GDP base year to 2022-23, which lowered the nominal GDP estimate for Q1 FY26 to ₹80 lakh crore from the earlier ₹86.1 lakh crore. Some commentators compared the latest Q1 FY27 figure against the older, higher estimate, arriving at a nominal growth of around 2.6 per cent — a comparison that SBI Research says is statistically invalid because it mixes two different base-year series.
What does SBI Research say India's actual GDP growth was in Q1 FY27?
SBI Research affirms that India's economy grew 7.8 per cent in real terms and 10.3 per cent in nominal terms in Q1 FY27. Using a consistent revised base year for both quarters, the report calculates nominal growth at nearly 9.7 per cent and implied real growth at around 7.4 per cent.
Did the GDP base-year revision inflate India's economic size?
No, according to SBI Research. The report explicitly states that the 2022-23 base-year revision has resulted in a lower nominal GDP estimate compared with the earlier series — the opposite of what critics have alleged.
When will the Q1 FY27 GDP figures be finalised?
According to SBI Research, the Q1 FY27 GDP figures released now will only be finalised by February 2029, after multiple rounds of revisions as additional data become available. GDP revisions are a standard part of national accounts compilation and can move in either direction.
Why do GDP base-year revisions happen?
Base-year revisions are carried out to improve consistency between price indicators, production measures, and GDP deflators, and to incorporate more comprehensive data over time. The NSO's latest revision to the 2022-23 base year also enhanced transparency by including revised historical data alongside the latest quarterly estimates.
