In fact, the new methodology of GDP and GVA computation is said to be more aligned to international practices. The argument that economists are making is that the data cannot compare the old methodology based computation with the new methodology as there are several improvements made as per the new methodology aligning with global good practice.

1 lakh crore (which is C Series). SBI example of various series and India's GDP data“This is completely unsolicited and a sure sign of intellectual dishonesty.

3%),” he says. DK Srivastava, Chief Policy Advisor, EY India tells TOI that there have been major methodological changes in the revision of the base year from 2011-12 to 2022-23.

These changes include changes in the relative weights of output sectors and demand segments, better coverage by the use of additional and more disaggregated data including GST data and by better methods of scaling up economic activities of the informal sector and companies that are not covered by the Ministry of Corporate Affairs (MCA) database. “For capturing the activities of the informal sector and companies not reporting to the MCA, various rates and ratios have been used in the 2011-12 series.

However, these ratios in the new series may be based on a number of detailed studies and may become more reliable,” EY’s Srivastava says. 5% implied GDP inflation rate.

9% and WPI inflation is much higher. The government has said that these indicators cannot be compared directly.

While CPI measures household consumption, WPI captures wholesale goods and excludes services. The GDP deflator reflects the entire economy, which includes government spending, investment, exports and services.

“The GDP deflator will never be equal to WPI or CPI. Historically under any series, the deflator is very different and does not follow any particular trend.

It is derived by dividing nominal by real GDP and hence is derived. All the CPI and WPI numbers are not used for deflating components of GDP,” explains Madan Sabnavis, Chief Economist, Bank of Baroda.

DK Srivastava details the methodology: GDP estimation is done by first aggregating nominal GVA to which indirect taxes net of subsidies are added to arrive at aggregate GDP at current market prices. "“The method of estimating implicit price deflators has also undergone major changes.

In particular, for selected sectors the double deflation method is being used for the first time in the 2022-23 base series. This involves using different deflators for output and intermediate goods.

This has been applied to sectors where detailed data for outputs and inputs are available. Further, WPI is not being used anymore wherever the producer price index has become available.

WPI used to contain some load of indirect taxes and wholesaler margins. In PPI these are eliminated.

Different sectors have been affected differentially in this process. Therefore an aggregate GDP deflator is not surprising," he says.

Why is manufacturing showing negative inflation? Another argument that is being used to question the accuracy of the GDP data is the deflator for manufacturing.

Prices haven’t fallen, so why is inflation via deflator negative? 7%, which means the implicit GVA deflator is negative.

The government says this does not mean manufacturing prices fell. How this works is due to double deflation in which output and intermediate consumption are separately adjusted for price changes.

If the prices of inputs rise faster than the prices of manufactured output, nominal GVA can grow more slowly than real GVA. This can result in a negative implicit GVA deflator even when both output and input prices are increasing.

How many times has base year been revised? “Companies have not quite passed on higher input costs which probably partly explains this phenomenon.

A negative deflator based inflation implies that output prices have increased at a rate lower than input prices. According to Srivastava, this can sometimes happen when the government as a policy chooses not to pass on all the increase in input costs to the retail level through tax concessions or specific subsidies.

“We all are aware that there was a spike in input prices owing to the Middle East conflict. We are also aware that companies have been reluctant to pass on the entire cost increases to consumers and there has been only a partial pass on and that too mostly after the first quarter.

Hence, a negative deflation for manufacturing is not surprising,” he says. Double Deflation: What does it mean?

Mining illustrates the opposite effect. 4% in Q1 FY27, which broadly consistent with weak mining IIP data.

But prices rose sharply. 7% in June.

3%, even though real GVA contracted. “Every year, MOSPI revises its previous year’s GDP estimates, both nominal and real, on a quarter-wise basis, reconciling them against the corresponding Annual Revised Estimates.

These revisions are released in February each year. In the current year (this time on 31 Aug’26), the National Accounts Statistics (NAS) has additionally incorporated revised numbers of previous years in the quarterly data itself for sake of more transparency (Annual as well as Quarters) to align with the base revisions carried out in CPI, IIP, WPI and PPI.

This is perfectly legitimate,” explains SBI’s Ghosh. This base alignment ensures that the GDP deflators and volume estimates remain consistent with the updated price and production indices underlying them.

The bottom line: Revisions are part and parcel of a GDP number. Incidentally, India fell to the sixth spot in the world’s largest economy list partly due to the downward revision of the GDP numbers earlier this year.

“This means we have to wait for 30 months to finally know where Q1 FY27 GDP numbers stand. Base revisions add an extra layer to this complicated process.

Interestingly, base year revision by NSO this time has reduced the size of nominal GDP. Thus the argument of GDP getting bigger because of base year revisions is another meaningless argument that is unnecessarily doing the rounds,” he concludes.

India has retained its tag of being the world’s fastest growing economy. As statistical methods evolve, calculations and final GDP numbers will continue to change.

For now, one should take heart from the fact that high frequency indicators such as UPI transactions, GST collections, car sales - are all pointing to a resilient economy that is fighting global economic odds to keep its growth engine chugging.

In Brief Posted: 7:00 AM PDT · October 6, 2026 Image Credits: Pinterest Pinterest on Tuesday showed off a new feature that will lever...