NEW DELHI: The Centre on Wednesday released a set of frequently asked questions to clarify the methodology behind India’s latest GDP estimates, following sharp opposition questions regarding the credibility of the 7.8% growth recorded in the April-June quarter.

The ministry of statistics and programme implementation stated that the FAQs explain key technical issues, including the use of double deflation, negative implicit deflators, differences between the GDP deflator, Consumer Price Index (CPI), and Wholesale Price Index (WPI) inflation, the gap between nominal and real GVA, statistical discrepancies, and revisions to the GDP series.

Government officials said the updated annual and quarterly GDP estimates, based on the 2022-23 base year, were released on August 31 utilizing new data sources and methodologies, notably incorporating the new series of the Output Producer Price Index (PPI) and Banking Services Price Index.

This official clarification arrived after senior Congress leaders openly questioned the 7.8% real GDP growth figure and drew public attention to the downward revision observed in the previous financial year's nominal GDP estimate.

Manufacturing Sector Deflator and Double Deflation Method

Addressing public queries over why the manufacturing sector recorded a negative inflation in GVA implicit deflator of “-1.5%” in Q1 of 2026-27 despite increases in both manufacturing output and input prices, the ministry explained that this figure does not imply that actual manufacturing prices declined.

Under the double-deflation method utilized If input prices rise at a faster pace than output prices, nominal GVA can grow more slowly than real GVA, resulting in a negative implicit deflator.

For Q1 of FY27, manufacturing nominal GVA expanded 7%, while real GVA grew 2%, which consequently produced a negative implicit GVA deflator of 1.5%, according to the government's detailed explanation.

Revisions to Current GDP and Base Year Adjustments

The government firmly rejected allegations that last year's current GDP was revised downward merely to make the current year’s economic growth rate appear significantly better on paper.

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Official records show that last year's Current GDP was adjusted from Rs. 86 lakh crore down to Rs. 80 lakh crore.

Specifically, the Q1 2025-26 GDP estimate went through several distinct revisions across multiple months.

On August 29, 2025, under the old 2011-12 base-year series, Q1 GDP at current prices was estimated at Rs 86.05 lakh crore. 32 lakh crore to incorporate updated data sources and methodologies.

Subsequently, on June 5, 2026, the estimate was updated to Rs 80.44 lakh crore based on newly available high-frequency indicators, and later revised to Rs 80.00 lakh crore with the incorporation of the new Index of Industrial Production (IIP) and Producer Price Index (PPI).

Reconciling Divergent Inflation Measures and Economic Indicators

The ministry addressed questions regarding how to reconcile a 2.5% implied GDP inflation rate when consumer inflation (CPI) stood at 3.9% and wholesale inflation (WPI) exceeded 9%, noting that these three macroeconomic measures serve entirely different purposes and cover different baskets of goods.

Statisticians clarified that the GDP deflator is derived directly from GDP at current and constant prices and therefore does not necessarily move in lockstep with either consumer price inflation or wholesale inflation indexes.

Furthermore, the ministry clarified that the double-deflation mechanism is not directly applied to calculate Private Final Consumption Expenditure (PFCE), as the deflation method applies strictly to production-side GVA.

Explaining Mining Sector GVA and Statistical Discrepancies

The government also shed light on the wide gap observed between nominal and real GVA growth in the mining sector, attributing the discrepancy largely to sharp increases in prices of crude petroleum, natural gas, and metal ores, even during months when overall physical mining output remained relatively weak.

Regarding statistical discrepancies-which represent balancing items arising from differences between GDP estimates compiled through production versus expenditure approaches-the ministry noted that current figures remain subject to normal revision.

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Officials assured that at the time of releasing final estimates at current prices, these statistical discrepancies will become very insignificant or zero, mirroring patterns seen in the finalized data for FY2022-23 and FY2023-24.

Political Backlash and Broader Economic Growth Projections

The Centre's detailed clarifications followed intense political criticism from the Congress party, where general secretary Jairam Ramesh cited former finance secretary Subhash Chandra Garg to argue that current-price growth would have been merely 2.6% without last year's revisions.

Jairam Ramesh remarked that "PR can polish the picture of GDP, but not the economy itself," while fellow Congress leader Pawan Khera questioned the revisions and called for greater transparency regarding the country's actual economic trajectory.

Union minister Kiren Rijiju hit back strongly against the opposition criticism, asking whether the Congress party was operating in a "state of deep intoxication" or had become excessively negative about national achievements.

According to official data released for Q1 FY27, real GDP is estimated at Rs 81.36 lakh crore, representing an 8.0% expansion compared to Rs 75.46 lakh crore recorded a year earlier. Nominal GDP stood at Rs 88.27 lakh crore, marking a 10.3% increase from Rs 80 lakh crore in Q1 FY26, while real GVA grew 8.2% to reach Rs 73.82 lakh crore.

The Reserve Bank of India has projected full-year FY27 GDP growth at 6.7%, with the upcoming quarterly GDP estimates covering Q2 FY27 scheduled for release on November 30, 2026.