India will overhaul how it calculates real GDP growth under a revised national accounts
series due to launch this week, the country’s top statistical
official said, adopting more granular price deflation to address
concerns raised by economists.
India measures real GDP – which adjusts for inflation – by
deflating nominal GDP growth using price indices. Economists
have raised concerns that the method is outdated as it relies
more on the wholesale price index and not the more closely
tracked consumer price index.
“We will now use about 500–600 items from the new CPI and
the old WPI series, compared with about 180 earlier, to deflate
the output and improve accuracy of the data,” Saurabh Garg,
secretary in the Ministry of Statistics and Programme
Implementation, said in an interview.
He said this practice will continue until a revised WPI
series is released, which is expected shortly.
Under previous methods, low nominal GDP growth alongside low
wholesale inflation created discrepancies by translating into
higher real growth rates.
Under the old series, India’s economy – among the fastest
growing major economies in the world – is estimated to expand by
7.4% in 2025/26 against a growth rate of 6.5% in 2024/25.
Nominal GDP – which reflects output measured at current
market prices – is estimated to grow 8.0% in the current year.
A new GDP series with a 2022/23 base year will be released
on February 27, along with back-series data for the previous
four years.
Statistical overhaul
The changes are part of a broader revamp of India’s
statistics, following the release of a new retail inflation
series earlier this month. Revisions to wholesale inflation and
industrial output are also under way.
In November, the International Monetary Fund raised concerns
over weaknesses in India’s national accounts methodology. The
IMF cited the outdated 2011/12 base year, reliance on wholesale
prices and extensive use of single deflation. It assigned the
framework a “C” rating.
At the core of the overhaul is the shift to double
deflation, which separately adjusts output and input prices to
measure real value added.
Garg said the reforms will improve accuracy, particularly in
manufacturing, where diverging input and output prices had
raised concerns about bias under the earlier single-deflation
method.
Published on February 24, 2026