Why last year’s GDP was revised down: Govt explains amid 7.8% Q1 growth debate

The government on Wednesday rejected allegations that last year's GDP was deliberately revised down to make the latest growth rate look stronger, saying the change reflected "successive methodological and data revisions" to the GDP series.

The clarification came amid a brewing political controversy over the 7.8% real GDP growth recorded in the April-June quarter.

Former finance secretary Subhash Chandra Garg, first on a news channel and later in an article, argued that growth in current prices would have been only 2.6% if last year's GDP had not been revised.

The Ministry of Statistics and Programme Implementation, in an explanatory note, said the Q1 2025-26 current-price GDP estimate had moved from ₹86.05 lakh crore under the old 2011-12 base-year series to ₹80 lakh crore under the revised 2022-23 series following successive revisions.

“It is therefore incorrect to interpret the difference as a deliberate downward revision of last year’s GDP to mechanically increase the current year’s growth rate,” the ministry said.

The ministry said quarterly GDP estimates are compiled using the "benchmark-indicator approach", under which movement in quarterly estimates is guided by relevant high-frequency indicators.

"A revision in the previous-year benchmark does not, by itself, create an artificial increase in the current year's underlying economic activity or the indicators used for estimation," it said.

In February 2026, the government introduced the new GDP series with 2022-23 as the base year. As part of the base-year revision, estimates for the entire time series were "comprehensively revised to incorporate updated data sources, improved methodologies, revised coverage and other relevant information", according to the government.

Under the new series, Q1 2025-26 current-price GDP was estimated at ₹80.32 lakh crore.

The estimate was subsequently updated to ₹80.44 lakh crore with the release of provisional GDP estimates for 2025-26 on June 5, 2026.

Later, new series data for the Index of Industrial Production and Producer Price Index became available and were incorporated into GDP compilation. This resulted in the Q1 2025-26 current-price GDP estimate being revised to ₹80 lakh crore.

"Thus, the movement from ₹86.05 lakh crore to ₹80.00 lakh crore is the result of successive revisions to the GDP series arising from the change in base year, incorporation of improved data sources and methodologies, and updation of available indicators," the ministry said.

It also pointed out that the ₹86.05 lakh crore estimate from the old 2011-12 series "cannot be directly compared" with the current Q1 2026-27 estimate under the revised 2022-23 series.

The relevant comparison for Q1 2026-27 GDP of ₹88.27 lakh crore, according to the government, is with the earlier Q1 2025-26 estimate of ₹80.32 lakh crore, and not with the old ₹86.05 lakh crore estimate from the superseded series.

The note also sought to explain the gap between the 2.5% implied GDP inflation rate and consumer inflation of 3.9% and wholesale inflation of more than 9%.

The GDP deflator, it said, measures the price impact on net value added across the entire economy and has a different coverage from CPI and WPI. It includes areas such as government spending, corporate investment, exports and financial and non-financial services.