On November 28, the Union Statistics and Programme Implementation Ministry reported that India’s real GDP grew 8.2% and the nominal GDP 8.7% in the second quarter of the financial year 2025-26 — the strongest print in six quarters. Just two days earlier, the IMF, in its data adequacy assessment, had given India’s national accounts a “C” grade — the second lowest in its four-tier system— noting “shortcomings that somewhat hamper surveillance”, even as the overall macro data set earned a “B”. The timing underscores a troubling irony.
India once set standards in official statistics. Under P.C. Mahalanobis, the National Sample Survey and a robust system of national accounts turned a poor postcolonial state into a model for the developing world. Today, that legacy is fraying. The uninterrupted decennial Census series (since 1881), which underpins most sampling frames, has been broken. The official consumption expenditure survey, the backbone of poverty and inequality statistics and consumer price index (CPI) reweighting, was last released in 2011-12. The 2017-18 round was scrapped after leaked results suggested a fall in real consumption, with the government citing “data quality” problems. In that sense, the IMF’s “C” grade distils several long-running concerns.
First, the current GDP series still uses 2011-12 as its base year — a benchmark that will be 14 years out of date by the time a new series with 2022-23 as base is rolled out in February 2026. Real growth, obtained by deflating nominal aggregates, uses price indices derived from consumption and production patterns that no longer accurately reflect the economy’s structure. Both the consumer and wholesale price baskets, which should be refreshed roughly every five years, are long overdue for revision.
Moreover, the narrow gap between nominal and real GDP in the latest quarter, barely half a percentage point, is also telling. When deflators are based on outdated expenditure weights, they are prone to understating effective inflation and overstating real growth. Point estimates of 8%-plus growth should, therefore, be treated as only indicative.
Second, the current price architecture is particularly ill-suited to a services-led economy. Services now account for about 55% of the gross value added (GVA). Yet India still relies heavily on the wholesale price index (WPI), which omits most services, for deflating output. The IMF has been explicit that the absence of a comprehensive producer price index (PPI) and “excessive use of single deflation” are central reasons for the “C” grade.
Third, the treatment of the informal economy in national statistics is a serious weakness. The informal sector contributes roughly 45% of the GDP, but is not measured annually from the ground up. Instead, statisticians fix the formal-informal relationship in the base year and then extrapolate informal activity from formal-sector indicators such as corporate filings or GST data. That shortcut might work in a stable environment, but it breaks down when shocks, such as demonetisation, GST, and the pandemic, hit small, cash-dependent firms much harder than listed companies. Proxying kirana stores, small workshops, and petty services with large firms makes aggregate GDP look healthier precisely when vulnerability is greatest.
Fourth, the quarterly GDP numbers are difficult to interpret in their current form. In an economy with pronounced monsoon and festival cycles, raw quarter-on-quarter changes say little about the underlying trajectory. Most advanced statistical systems publish seasonally adjusted series to strip out predictable intra-year patterns and identify genuine turning points. India does not, leaving investors and policymakers to read the cycle off unadjusted GDP, where a festival quarter and a genuine upswing are virtually indistinguishable.
Reform agenda
To be fair, India is moving on the reform agenda. A new GDP series with 2022-23 as the base, an updated CPI with 2024 weights, and a revised IIP are all slated for release in early 2026, with greater use of GST returns, corporate filings, digital payments, and recent consumption and enterprise survey data. If these revisions are implemented rigorously and then institutionalised as a regular cycle, India’s statistical methods will come much closer to international best practice.
Three reforms are essential. First, statistics must be treated as economic infrastructure, not an administrative by-product. The National Statistical Commission (NSC) should be given a firm statutory basis, its own budget, security of tenure for members, and a clear mandate to publish data without political clearance, with protections for its Chair analogous to those of the RBI Governor. India was an early supporter of the UN’s Fundamental Principles of Official Statistics. It now needs to write those principles into domestic law rather than merely endorsing them in international forums.
Second, a binding data calendar is overdue. The Census, consumption, labour-force and enterprise surveys should have legislated periodicity and statutory deadlines for release, with deviations explained to Parliament. Anonymised microdata should be routinely available to researchers with reasonable lags to enable independent “shadow” estimates that provide external validation, as investors and multilaterals often demand.
Third, as digital sources multiply, the risk grows that selective high-frequency indicators (GST collections, toll data, UPI volumes) will substitute for, rather than complement, a coherent system. The integration of digital data into national accounts must be transparent and replicable; otherwise, dashboards will multiply, but doubts will persist.
For global investors, weak and unreliable data mean mispriced risk; for policymakers, they mean misjudged slack, misplaced priorities and a macro stance looser than what fundamentals warrant. If trend growth is overstated and poverty undercounted, job creation looks less urgent than it is, and the case for safety nets and basic public goods appears weaker than it should. India’s economic rise is real, but its statistical institutions have not kept pace. If the coming overhaul succeeds in building an independent, modern and transparent system, what will finally matter is not IMF’s grade card, but whether an 8.2% print commands confidence, not scepticism.
Sankalpa Bhattacharjee and Amarendu Nandy are faculty members in the economics and public policy area at the Indian Institute of Management, Ranchi; views expressed are personal.
Published – December 18, 2025 12:21 am IST
