India’s latest GDP figures have triggered an unusual controversy. The government says the economy grew by a strong 7.8% in the April-June quarter. Former finance secretary and economist Subhash Chandra Garg, however, has sharply challenged this figure, arguing that the actual growth could be close to zero, with nominal growth at only around 2.6%. The difference is enormous. It is not a minor disagreement over decimals. It raises a basic question- How accurately are we measuring the Indian economy? GDP, or Gross Domestic Product, is simply the total value of goods and services produced by a country. It is one of the main ways governments, investors and economists judge whether an economy is expanding or slowing down. When the GDP grows rapidly, it generally suggests that economic activity is increasing. That is why the government has welcomed the 7.8% figure. It is considerably higher than the Reserve Bank of India’s earlier estimate of 7% and better than what many economists had expected. However, Garg’s criticism has put a question mark over the calculation. The government has recently changed the way GDP is calculated. The base year has been changed to 2022-23, while newer price and production data have been introduced. The government says these changes make the figures more accurate and bring India’s statistical system closer to international practices. One important change is what economists call “double deflation.” In simple terms, when calculating real economic growth, the government tries to separately account for changes in the prices of what businesses produce and what they use as inputs. This is meant to give a clearer picture of how much businesses are actually producing rather than simply reflecting changes in prices. The government argues that the earlier system was less precise and that the new method provides hundreds of additional price indicators. It also points to strong growth in services and manufacturing and claims that ays the quarterly figures are based on hundreds of indicators, including steel consumption, cement production, vehicle sales and agricultural output. There is nothing inherently suspicious about changing the method of calculating GDP. Statistical systems need to be updated as an economy changes. Nor does every revision prove that figures have been manipulated. However, the government’s explanation does not automatically settle the controversy. Garg’s criticism deserves examination precisely because he is not an outsider unfamiliar with government statistics. As a former finance secretary, he understands how economic data are compiled. His claim that nominal growth should have been around 2.6% and real growth “close to zero” is therefore significant enough to merit an independent examination. At the same time, saying that the figures were deliberately “engineered” to support government propaganda is a serious allegation. It cannot be established simply because the final number happens to be politically convenient. It requires evidence showing how the calculations were manipulated. The best answer, therefore, is greater transparency. The government should make the underlying calculations, price adjustments, assumptions and data available for independent economists to examine and reproduce. If the 7.8% figure is correct, scrutiny will ultimately strengthen it. India needs reliable economic statistics more than impressive headlines. A government can survive criticism, but a country cannot afford to lose confidence in its economic numbers. GDP figures should tell us what is actually happening in the economy-not what either the government or its opponents want us to believe. The credibility of India’s growth story will depend not on how high the number looks, but on how convincingly it can withstand independent scrutiny.
Friday, September 4, 2026