DC Edit | Is Govt’s Growth Story Only Half-Told?

About five days ago, India was pleasantly surprised by the Central government’s quarterly economic data, which pegged the country’s economic growth at an enviable 7.6 per cent. The rate of economic expansion beat various growth forecasts, including that of the Reserve Bank of India (RBI), by a wide margin.

Though India had witnessed economic growth rates higher than 7.6 per cent, this number was exceptional in view of global economic and geopolitical uncertainty. The nation rejoiced until former finance secretary Subhash Chandra Garg raised doubts about the reliability of the growth figure following a downward revision of the economic activity recorded in the corresponding quarter of the previous year.

Garg, a cost accountant and an IAS officer from the Rajasthan cadre, was not an ordinary career civil servant. He was an executive director of the World Bank from September 2014 to June 2017. He served in various roles at the finance ministry and as a director of the Reserve Bank of India from July 2017 to July 2019. His educational background, profile and lack of any connection with Opposition parties — his rise coincided with the emergence of the BJP as the pre-eminent power in New Delhi — lent credence to his words.

The former finance secretary’s argument is very simple: if you shorten the yardstick used to measure growth, the resulting growth will obviously be extraordinary.

According to him, the country’s economy grew by 7.6 per cent in Q1 of fiscal 2026-27 because the government had lowered the size of the gross domestic product in Q1 2025-26 — the previous year’s output used as the yardstick — from Rs 86 lakh crore to Rs 80 lakh crore. If the government had not shortened the yardstick (GDP size in Q1 FY 2025-26), the data would have shown a growth rate of 2.6 per cent — approximately Rs 88.26 lakh crore in Q1 FY 2026-27 compared with Rs 86.05 lakh crore in Q1 FY 2025-26.

The government and many economists countered Mr Garg’s argument by stating that revision of the base year is an accepted principle in statistics. They also argued that one cannot compare data calculated using an old base with numbers produced using a new base because they represent different sets of numbers and are, therefore, incomparable.

The government’s stand is plausible from a statistical point of view, but Mr Garg’s argument is easily comprehensible to the average citizen of this country. The “2.6 per cent growth rate” could create a narrative against the government, especially in the wake of the jobless economic growth and premiumisation of the economy that the country has been witnessing in recent years.

Irrespective of the battles over narratives in which political parties have been engaged, a manufactured doomsday scenario would not be good for the country because it would slow down the investment cycle. Similarly, a manufactured growth narrative would not be good for the country because it would prevent timely interventions required to get the economy back on track.

If the government wants to avoid speculation about the economy, it should be forthcoming in releasing data. If the Ministry of statistics had calculated growth figures using both base years for the initial three years, it would have left no room for unwarranted speculation.