There has been an uproar ever since the first quarter GDP figures were revealed. The opposition is saying that the kiln has set in, while the government is saying that everything is good. Actually the first quarter conditions were opposite. The Iran-America war was at its peak. Crude oil was on fire and petrol and diesel became expensive. Gold was made expensive by imposing taxes. The Reserve Bank itself had assessed that growth may slow down and inflation may increase. Inflation increased but growth did not decrease. that is a relief.
This very matter of relief is bothering the opposition. After the opposition’s questions, the government has now clarified that it has not reduced the GDP at current prices for Q1 2025-26 from Rs 86 lakh crore to Rs 80 lakh crore, so that this year’s GDP can look better. On Tuesday, the government said that India’s GDP growth rate in the April-June 2026 quarter was 7.8%.
The clarification comes as critics and the opposition said the government downgraded Q1 FY26 GDP (at current prices) from Rs 86.05 lakh crore under the old 2011-12 base year series to Rs 80 lakh crore under the new 2022-23 series, to project higher growth.
So would GDP growth have been only 2.6%?
A former finance secretary said, “If last year’s GDP had not been revised upwards, growth at current prices would have been only 2.6%.” The opposition raised this statement and said that the government used the new series to make the existing growth look better.
‘There was no deliberate reduction in change’
The Ministry of Statistics and Program Implementation said in a statement that the change in the estimates for the first quarter of 2025-26 is not a deliberate downgrade to make this year’s growth look higher. Rather, this change is the result of continuous improvements in the methods and data in the GDP series.
How did the government release Q1 GDP figures?
The statement said that the government had released the first quarter GDP estimate of Rs 86.05 lakh crore. This estimate was based on the then 2011-12 base year series, but in February this year, the ministry introduced a new GDP series with 2022-23 as the base year.
Under this, ‘GDP estimates for the entire time period are completely revised to incorporate new data sources, improved methods, revised coverage and other relevant information’.
The ministry said new indicators and figures were added to the GDP calculation. Inclusion of these necessitated updating the GDP projections beyond 2022-23. Due to this, GDP (at current prices) for Q1 2025-26 was revised to Rs 80.00 lakh crore.
Base year changed in GDP series
The Modi government said that this change from Rs 86.05 lakh crore to Rs 80.00 lakh crore is due to changing the base year in the GDP series, incorporating better data sources and methods and updating the available indicators. This was not a deliberate attempt to understate last year’s GDP so that this year’s growth rate would mechanically increase.
The government said since the base year has changed, it would be wrong to compare the Rs 86.05 lakh crore figure based on the 2011-12 series with the current Q1 2026-27 estimate under the revised 2022-23 series. Therefore, the correct comparison under the new series would be to compare Rs 80 lakh crore with Rs 88.27 lakh crore, which is the figure for the first quarter of 2026-27.
