GDP growth at 7.8%: Arvind Subramanian says India’s data needs more transparency, trust

India’s latest GDP data has triggered a fresh debate over whether the economy actually grew as strongly as the official figures suggest. While the Ministry of Statistics and Programme Implementation (MoSPI) has defended the 7.8% growth estimate on technical grounds, former Chief Economic Adviser Arvind Subramanian has questioned whether the numbers are consistent with economic conditions on the ground.

In a four-point assessment, Subramanian said the latest GDP numbers are plausible on technical grounds and that some coincident macroeconomic indicators also point to stronger economic activity. However, he argued that the government’s handling of economic data has created a trust deficit, making the latest estimates more difficult for the public and independent economists to accept.

Why the 7.8% figure is being questioned

According to Subramanian, MoSPI is technically correct in pointing out that comparisons between GDP estimates calculated using the new methodology and those based on the earlier methodology are not directly comparable. When the new methodology is applied consistently, the real growth rate is 7.8%.

He also noted that some indicators support the possibility of strong growth. Real sales growth of listed firms and real non-food credit growth were both 14.9%, while real exports grew 12.1%.

However, Subramanian said the bigger issue is the credibility of official data. He pointed to concerns over the delayed Census, the withdrawal of the 2017 consumption survey and questions over other official estimates. In this environment, he said, the burden of proof has shifted to the government to demonstrate the integrity of its data.

He also questioned why first-quarter FY2025-26 GDP was revised down by 7% when the methodology was changed, and why a long-back series explaining when the loss of growth occurred has not yet been released.

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Energy shock adds to the puzzle

Subramanian also argued that the latest growth estimate appears disconnected from economic conditions during April and May 2026, when fuel shortages and rationing affected travel and businesses.

The rise in energy costs, he said, effectively amounted to a tax increase of around 1.5% of GDP. This came alongside tepid wage growth, weak job creation, a declining stock market and pressure on the currency.

Against this backdrop, he said, it would have been impressive if India had simply maintained its earlier growth rate. Instead, MoSPI's estimate suggests growth accelerated by nearly one percentage point.

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What should the government do?

Subramanian said the government needs to provide a credible, research-backed explanation for how growth accelerated despite the energy shock. It should also explain why nominal net GST revenue grew only 5%, why import volumes fell and why the manufacturing deflator was negative despite improving business margins.

He called for the release of the complete “Sources and Methods” document explaining how GDP is calculated and revised.

Finally, Subramanian argued that the logic used to defend the latest GDP numbers should also be applied to earlier estimates. If current growth is supported by indicators such as sales, trade, electricity and investment, he said, similar GDP growth rates reported over the previous 15 years also deserve scrutiny.

“The latest numbers are plausible,” Subramanian said, but restoring confidence will require the government to publish the underlying data and methodology and address the inconsistencies that continue to fuel doubts.

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