India defends GDP revisions, citing new data and methodology

Key facts

• India's economy grew 7.8% in the April-June quarter.
• The latest GDP figures are based on a new series with a 2022/23 base year.
• Revisions incorporate updated sources, methodology, and more granular price data.
• The number of price deflators used in estimates increased to over 300 from 180.
• The government stated quarterly revisions have moved in both directions over the past three years.

India's statistics secretary, Saurabh Garg, defended the country's latest GDP growth estimate of 7.8% for the April-June quarter, along with significant revisions to recent historical data. He stated that these changes are a result of incorporating more granular price data and additional sources, rather than any systematic bias in the figures.

Garg's comments came in response to concerns raised by former finance secretary Subhash Chandra Garg, who suggested that a downward revision to previous quarters' growth made the latest figure appear stronger. The statistics ministry rejected this interpretation, explaining that the current estimates are based on a new GDP series with a 2022/23 base year, which involved revising historical data to include updated methodologies and sources.

The 7.8% growth for the April-June quarter exceeded economists' expectations and the Reserve Bank of India's forecast of 7%. While growth slowed from the revised 8.6% in the January-March quarter, it accelerated from 6.9% a year prior. Opposition parties have used the former finance secretary's remarks to accuse the government of manipulating data.

Saurabh Garg further elaborated that the revisions were also driven by a shift from wholesale price data to a producer price index, which offers more detailed price information. The number of price deflators used in the estimates has increased to over 300 from approximately 180. He also countered claims that revisions were systematically lowering previous years' bases to inflate subsequent growth, noting that quarterly revisions over the past three years have varied in direction and annual changes have been relatively small.