Congress MP Shashi Tharoor has raised questions over the credibility of India’s latest economic growth figures, arguing that the debate surrounding GDP is not limited to one quarterly estimate but reflects wider concerns about the reliability and transparency of official statistics.
His comments came after India reported real GDP growth of 7.8% for the first quarter of 2026. While the figure indicates strong economic expansion, Tharoor argued that the headline number needs to be examined alongside changes in the methodology used to calculate national output and the broader economic conditions experienced by households and businesses.
Dispute Over New GDP Base Year
A major part of the controversy concerns the shift from the earlier 2011-12 base year to a new 2022-23 base year for national accounts.
Updating the base year is a normal statistical exercise intended to make economic estimates more relevant to structural changes in the economy. However, critics have questioned the effect of the revisions on comparisons with previous years.
According to Tharoor's analysis, the revised calculations reduced the estimated GDP for 2024-25 by about ₹12.7 trillion. He argued that the lower previous-year figure increased the apparent rate of growth in the latest quarter.
Under the revised methodology, nominal GDP growth for the first quarter was reported at 10.3%, while real GDP growth stood at 7.8%. Tharoor questioned whether the revised baseline could make the latest performance appear stronger than it otherwise would have.
Questions Around GDP Deflator
Tharoor also focused on the GDP deflator, which is used to convert nominal economic growth into an inflation-adjusted measure.
He argued that India does not currently have a functioning Producer Price Index (PPI) capable of providing the type of detailed price information needed for a robust calculation. According to his assessment, the official GDP deflator of around 2.5% may not fully reflect price pressures across the economy.
The concern is important because a lower estimate of inflation results in a larger calculated figure for real GDP growth. Tharoor therefore questioned whether the methodology adequately captures price changes across different parts of the economy.
Broader Concerns About Official Statistics
The Congress leader placed the current GDP debate within a much longer discussion about India's statistical institutions.
He referred to controversies surrounding economic and social data following demonetisation, the introduction of the Goods and Services Tax, the Covid-19 period and changes involving government statistical bodies. He also pointed to earlier debates involving unemployment and household consumption data.
Tharoor cited concerns previously expressed by economists including former Chief Economic Adviser Arvind Subramanian and former Reserve Bank of India Governor Raghuram Rajan. He also noted that international institutions have raised questions about aspects of India's economic data.
Informal Economy Remains a Key Issue
Another concern highlighted in the argument is India's large informal sector. Small businesses, cash-based enterprises and unregistered economic activity account for a substantial portion of overall economic activity but are difficult to measure directly.
Tharoor argued that using the performance of larger formal companies as a proxy for parts of the informal economy could fail to capture the impact of events such as demonetisation, GST implementation and the Covid lockdowns on smaller businesses.
He also pointed to relatively weak job creation, cautious private investment and foreign investment trends as indicators that deserve consideration alongside headline GDP growth.
Call for Greater Statistical Transparency
Tharoor's proposed solution is greater transparency when India changes its national accounting methodology. He argued that old and new calculation systems should be published alongside each other during a transition period, allowing economists, researchers and the public to compare the results.
The wider issue, he suggested, is not simply whether India's economy is growing quickly, but whether citizens and policymakers can have confidence in the figures used to measure that growth.
The debate over GDP statistics is therefore likely to continue, with questions about methodology, data quality and the relationship between headline economic growth and conditions on the ground remaining central to the discussion.
