SBI Report Debunks GDP 'Missing Sums' Myth

The latest SBI Ecowrap report dismisses claims about missing figures in India's GDP data as fiction, attributing discrepancies to standard statistical revisions. The report rebuts criticisms of adjustments in GDP figures, supporting the official 7.8% growth rate for Q1 FY27 and explains sectoral influences on GDP estimates.

According to the recent SBI Ecowrap report, assertions regarding missing sums in national GDP data are unfounded and likened to a flawed fictional narrative. It describes criticisms about adjustments in India's nominal GDP as inaccurate, citing an incorrect comparison between different statistical series. The report addresses the economic debates following the recent announcement of 7.8% GDP growth in the first quarter.

The report strongly criticizes narratives spread by certain intellectuals which claimed the absence of Rs 6 lakh crore or Rs 42 lakh crore in nominal GDP figures between Q1 FY26 and Q2 FY26. SBI dismissed these as illogical, emphasizing that such stories are devoid of factual basis.

Former Finance Secretary Subhash Chandra Garg had questioned the reported GDP growth, due to revisions of last year’s GDP from Rs 86 lakh crore to Rs 80 lakh crore. He argued this revision skewed growth perceptions. However, official data indicated India's real GDP grew by 7.8% year-on-year, and nominal GDP increased by 10.3%.

SBI highlighted that revisions are usual when the base year changes, citing 239 modifications over 70 quarters since FY09. The adjustments, both upward and downward, align with sectoral data changes due to the FY23 base year adoption. Notably, sectors like Trade and Transport saw significant revisions, contrasting with positive updates in finance and related sectors.

The report emphasized better economic activity mapping in informal sectors through new methodologies post-FY23. These adjustments reflected the ongoing formalization and financialization in the economy, partly driven by digital payments and banking penetration.

With regard to deflator construction, SBI noted that publicly accessible data can replicate official indices closely. The report's sector deflators matched official statistics, with the overall GVA deflator estimated at 3.7%, close to the official figure of 3%. Economic indicators support sustained growth exceeding 7% since FY23.

SBI asserts that using publicly available price and volume indicators allows for close replication of official deflator methods, demonstrating alignment with Ministry of Statistics and Programme Implementation figures across various sectors, bolstering economic growth projections.