Former finance secretary says India's headline growth rate is 'greatly distorted'. Here is what the dispute rests on
Subhash Garg's intervention reopened an argument about national accounts that had been settled, on paper, since the last base-year revision. The government's own data has not changed. The measurement question has.
By Karan Malhotra · Business Editor, Business
The short version
- Garg put nominal GDP growth for the quarter at 2.6%, against the official 10.3%.
- The opposition has cited his analysis in questioning the official print.
- The Central Economic Adviser has called the quarter's performance evidence of continued resilience.
The official number has not moved. Real GDP grew 7.8% in the April-June quarter of 2026-27, the National Statistics Office said on August 31, with real gross value added up 8.2% and nominal GDP up 10.3%.
What has moved is the argument about it. Subhash Garg, a former Finance Secretary, said in September that nominal growth in the quarter was 2.6% rather than 10.3%, and that adjusting for inflation of two to two-and-a-half per cent left real growth close to zero. Opposition parties have cited the analysis in questioning the official series.
Garg's method — comparing a figure computed on the old 2011-12 base with a figure computed on the new 2022-23 base — produces a number about the size of the rebasing discontinuity rather than about the quarter. NOT SCRIPTED has examined the arithmetic; the distinction is explained in our explainer on the base-year question.
What the government points to
Chief Economic Adviser V. Anantha Nageswaran said the message from the data was continued resilience in Indian growth, backed by high-frequency indicators. The government has leaned on the composition of the print: manufacturing up 9.2%, construction up 7.7%, financial, real estate, IT and professional services up 12.1%, and gross fixed capital formation up 11.9%.
- Manufacturing growth of 9.2% was a three-quarter high, against 8.3% in the same quarter a year earlier.
- The tertiary sector grew 10% cumulatively, against 8% a year earlier.
- Agriculture slowed to 3.6% from 4.4%, and mining contracted 2.4% against a high base.
Why the timing matters
The dispute landed in the weeks after the Reserve Bank of India trimmed its growth projection for the current year to 6.6%, which is markedly below the pace of the first quarter. That gap — a fast quarter against a slower forecast year — is where the political argument is being fought, because it determines whether the first quarter was a trend or an outlier.
It is also worth noting what the criticism is not saying. No one in this argument has produced a competing set of quarterly accounts. The challenge is about how the official accounts are constructed, not about an alternative measurement of the same quarter.
Sources — 3 references
These are the published sources this article was established against. NOT SCRIPTED wrote the text above; the sources below are credited to their own publishers.
About the byline
Karan Malhotra
Runs the business desk. Writes on corporate governance and the Indian conglomerate.
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