Political Row Erupts Over India's 7.8 Percent GDP Growth Report

The Indian government reported a real GDP growth rate of 7.8 percent for the April to June 2026 quarter, sparking a sharp dispute over the methodology used to calculate the figures. The Ministry of Statistics and Programme Implementation stated that the services sector grew by 10 percent and the manufacturing sector grew by 9.2 percent during this period. However, the Congress party has questioned these estimates, citing a cumulative downward revision of 43 lakh crore rupees in the estimated size of the Indian economy over the past four years. Congress leader Jairam Ramesh alleged that the government is using statistical gymnastics to hide a bleak economic reality, arguing that the GDP deflator of 2.5 percent understates the actual inflation experienced by households. The opposition cited calculations by former Finance Secretary Subhash Chandra Garg, who claimed that nominal growth would have been closer to 2.6 percent if the base for the June 2025 quarter had not been revised downward from 86 lakh crore to 80 lakh crore rupees. In response, World Bank Executive Director Neelkanth Mishra described the claims that growth was only 2.6 percent as ill educated and egregiously wrong. Mishra stated that the new data series introduced in February 2026 improved methodology and increased the credibility of real output estimates. He pointed to robust indicators such as a 35 percent year on year growth in personal vehicle dispatches in August as evidence of strong momentum. Sanjeev Sanyal, a member of the Prime Minister's Economic Advisory Council, defended the timing of the base year update, explaining that the government had to wait until 2024 to find a typical year that was not distorted by the Covid 19 pandemic. Some analysts argue that the low deflator is a result of double deflation for manufacturing and agriculture, as well as the impact of government excise surrenders on fuel and high fertilizer subsidies.