New Delhi, October 15: Busting the controversies around the validity of India’s economic performance, the International Monetary Fund (IMF) has endorsed the country’s GDP calculation, saying it remains consistent with international standards. This validation comes as the government has published data claiming a 7.8% GDP growth rate for the first quarter of the financial year 2026-27.
These discussions on the change in calculation methodology follow the authorities’ shift in the reference point for measuring economic change, moving the base year from 2011-12 to 2022-23. This revision is needed to periodically reflect the changes in economic activity and to factor in the structure of different industries and consumption patterns.
This revision also brings with it newer data sources and improved methods to measure output, with the aim being to provide a more accurate picture of the economy.
The new GDP calculation introduces changes to the way economic activity is measured, including the use of newer price indices and a revised approach to calculate manufacturing output.
Abhinav Tripathi, a senior economist, explains how one of this change accounts for price movements.
“One important change is the use of double deflation for manufacturing. Under this method, changes in the prices of a company’s output and the goods and services it uses as inputs are measured separately. This helps estimate the actual change in production after accounting for price movements,” he said in an interaction with NDTV.
With the IMF supporting these statistical improvements, the government has shown how India continues to grow consistently as an emerging economy. Separately, it has also forecasted India’s growth to be at 7% for the upcoming year, up from 6.4% growth forecast made for last year. Other rating agencies, including Standard and Poor’s (S&P), Moody’s and ADB, have also forecasted India’s growth to be upwards of 7%, in line with the government’s estimates.
