Behind the 7.8% Boom: Why Experts Are Questioning India's Latest GDP Numbers

New Delhi: India's stronger-than-expected economic growth figures have come under scrutiny after a former senior finance ministry official said the headline number may have been boosted by changes to past data.

India reported robust year-on-year GDP growth of 7.8 percent in the April-June quarter, beating forecasts and giving Prime Minister Narendra Modi's government a fresh opportunity to showcase the economy's resilience despite global uncertainty.

But critics say the figure was calculated against a revised and lower base for the same quarter a year earlier, making growth appear stronger than it otherwise would have been.

The debate centres around a new framework for calculating economic output that was introduced in February.

Subhash Chandra Garg, a former finance secretary, has argued that quarterly growth has been unfairly inflated because it was calculated on the basis of revised numbers that resulted in a lower base for the same period last year.

Nominal GDP for the April-June quarter of 2025 was cut from about 86 trillion rupees ($910 billion) to 80 trillion rupees under the revised calculations, according to Garg.

A lower base raises the growth rate for this year, he has said, adding that the adjustments have created distortions in sector-level performance.

New Delhi has countered that the revisions were routine and has rejected the notion that they were designed to make current growth look stronger.

Many developing economies, like India, use a fixed base year to calculate changes in GDP, typically updating it once or twice a decade.

Indian officials say the changes stem from a broad statistical overhaul announced in February, when the country updated its GDP series and shifted the base year to 2022-23 from 2011-12.

The amendments also incorporated new data sources and more detailed methods for adjusting for inflation, which the government says are needed to better reflect the structure of a rapidly evolving economy.

It says the reduction in last year's GDP estimates is a consequence of these routine revisions rather than any attempt to boost current growth figures.

Technical disputes over national accounting rarely become political flashpoints.

But Garg has been a frequent critic of the Modi government since leaving office in 2019, and his comments were swiftly seized upon by the opposition Congress party.

It has accused the government of "fudging" the numbers to hide the "real economic distress of the country".

The row has tapped into broader concerns about transparency and accountability, while reviving a long-running debate over whether rapid economic growth is translating into enough quality jobs for India's expanding workforce.

It also comes after a wave of student protests over inequality and corruption in the education system led to the resignation of a senior minister.

Many economists say there is ample evidence that economic activity strengthened during the quarter, regardless of where the precise growth rate eventually settles.

They point to solid performances in indicators that are harder to dispute, including car sales, tax collections and bank lending, alongside a rebound in consumption following income tax cuts introduced last year.

Analysts also say stronger domestic demand helped cushion India from external shocks, including geopolitical tensions linked to the Iran conflict.

"High frequency indicators have been robust, so while we can debate the exact numbers, that underlying momentum has been fairly strong," Teresa John of Nirmal Bang Institutional Equities told AFP.