SBI rejects criticism of India’s 7.8 pc Q1 GDP growth, says 2.6 pc nominal growth calculation is misleading

NEW DELHI: The State Bank of India (SBI) has rejected criticism of India’s 7.8 per cent real GDP growth in the first quarter of FY27, saying the calculation that puts nominal GDP growth at 2.6 per cent is based on an incorrect comparison of GDP numbers.

Former Finance Secretary Subhash Chandra Garg, speaking to a business TV news channel, had questioned the reported 7.8 per cent GDP growth in Q1 FY27, pointing out that last year’s current-price GDP had been revised from around Rs 86 lakh crore to Rs 80 lakh crore. He argued that without this revision, the growth at current prices would have been around 2.6 per cent.

According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s real GDP grew 7.8 per cent year-on-year in Q1 FY27. Real GDP at constant prices was estimated at Rs 81.36 lakh crore, compared with Rs 75.46 lakh crore in the same quarter of FY26. Nominal GDP grew 10.3 per cent year-on-year.

SBI, however, said the 2.6 per cent calculation is not the correct way to compare the latest GDP numbers. When the NSO released Q1 FY26 GDP numbers on August 29, 2025, nominal GDP for the quarter was Rs 86.1 lakh crore. In the August 31, 2026 release under the new GDP base of 2022-23, the Q1 FY26 GDP number was revised downwards to Rs 80 lakh crore.  At the same time, Q1 FY27 nominal GDP was estimated at Rs 88.3 lakh crore.

#WATCH | Delhi: On former Finance Secretary Subhash Chandra Garg’s statement alleging GDP data revision from Rs 86 lakh crore to Rs 80 lakh crore to inflate the latest Q1 2026-2027 figures, Ministry of Statistics and Programme Implementation (MoSPI) Secretary Saurabh Garg says,… pic.twitter.com/ms7dUw1dvV

— ANI (@ANI) September 2, 2026

SBI said some estimates are calculating 2.6 per cent nominal GDP growth by comparing Rs 88.3 lakh crore for Q1 FY27 with the earlier Rs 86.1 lakh crore estimate for Q1 FY26. “Some estimates are now ascribing a 2.6 per cent growth in nominal GDP for the latest quarter instead of 10.3 per cent, by calculating yearly growth rate using Rs 88.3 lakh crore (we call it A series in the adjacent table) over Rs 86.1 lakh crore (we call it C series). This is completely unsolicited and a sure sign of intellectual dishonesty”, SBI said.

The bank said that if the latest Q1 FY27 figure is compared with the revised Q1 FY26 figure under the new GDP series, nominal GDP growth comes to 9.7 per cent. “If anyone truly wants to compare current nominal GDP numbers over the previous unrevised base of Q1 GDP, then Rs 88.3 lakh crore (new base, A series) should be estimated over Rs 80.4 lakh crore (new base, B series), which comes out to 9.7 per cent growth (as against 10.3 per cent)”, the report said.

SBI further said that even under this alternative calculation, real GDP growth would remain strong. “Hypothetically, even with this nominal growth (by adjusting deflator), the real growth for Q1 FY27 would be 7.4 per cent (as against released 7.8 per cent), still good enough when looking at wall of exogenous challenges”, it said.

The SBI report also said that revisions are a normal part of GDP estimates. It noted that quarterly numbers can be revised both upwards and downwards. During FY22-25, quarterly data saw 25 upward revisions and 12 downward revisions.

SBI said the latest controversy arose because the National Accounts Statistics had, this time, incorporated revised numbers of previous years directly into the quarterly data.  The report said this was done to provide greater transparency and to align the data with base revisions carried out in CPI, IIP, WPI and PPI.

“This is perfectly legitimate”, SBI said, adding that the base alignment ensures that GDP deflators and volume estimates remain consistent with the updated price and production indices.

The report also noted that the latest Q1 FY27 GDP figure released in August 2026 will undergo further revisions and will only be finalised by February 2029. “Revisions are part and parcel of a GDP number”, SBI said.

The bank also rejected the argument that the base-year revision had made India’s nominal GDP larger. It pointed out that the latest base-year revision had actually reduced the size of nominal GDP. (ANI)