Govt Defends GDP Data, Rejects Claims of Window Dressing

The government defended India’s April-June GDP estimates on Tuesday, rejecting criticism that revisions to the previous year’s nominal GDP and a low implicit deflator had boosted the latest growth figures.

India’s real GDP grew 7.8% from a year earlier in the April-June quarter, while nominal GDP expanded 10.3%.

The Statistics Ministry rejected claims that nominal GDP for April-June 2025 had been revised down from ₹86.05 trillion to ₹80.00 trillion to make the current year’s growth appear stronger.

It said the ₹86.05-trillion estimate belonged to the superseded 2011-12 base-year series and could not be directly compared with the latest estimate under the 2022-23 series.

Under the new series, April-June 2025 nominal GDP was initially estimated at ₹80.32 trillion, subsequently revised to ₹80.44 trillion and then to ₹80.00 trillion after new industrial production and producer price indices were incorporated.

The ministry also defended the relatively low implicit GDP deflator, saying it was derived from more than 300 individual price deflators and did not need to move in line with consumer or wholesale inflation.

It said the GDP deflator covers the entire economy, including investment, government spending, exports and services, while CPI and WPI measure different baskets and use different weights.

The government also addressed the negative implicit deflator in manufacturing, where nominal GVA grew 7.7% while real GVA increased 9.2%.

It said the negative deflator did not imply that manufactured-goods prices had fallen. Under the double-deflation method, output and intermediate inputs are deflated separately, and a faster rise in input prices than output prices can result in nominal GVA growing more slowly than real GVA.

The ministry said this pattern was visible in textiles and cotton ginning, basic metals, and rubber and plastic products.

It also explained the wide gap in mining, where real GVA contracted 2.4% but nominal GVA grew 22.3%. The ministry attributed the divergence to sharp increases in producer prices for crude petroleum, natural gas and metal ores.

On statistical discrepancies between the production and expenditure measures of GDP, the ministry said their current size did not imply that GDP would necessarily face a large revision later.

The direction and magnitude of future revisions would depend on incoming source data rather than any mechanical adjustment of the discrepancy, it said.