India’s GDP mirage and the lives it refuses to count

 

On August 29, the National Statistics Office (NSO) announced that India’s GDP grew 7.8 per cent in the first quarter (April-June) of 2025-26 compared to the same quarter last year. The number drew instantaneous celebration. It “underscored India’s status as the fastest-growing major economy”, wrote the Times of India. Growth “hits five-quarter high, beats RBI forecast”, read the Business Standard headline. Even the usually sober Scroll. in repeated the refrain without comment on the extremely problematic nature of the data and the extravagant interpretations.

GDP is not cricket. India’s quarterly GDP announcements are not a version of ball-by-ball analysis, not least because the statistics are riddled with estimation problems and poor coverage. Consider the latest estimate of 7.8 per cent growth. The NSO considers the income generated as its measure of GDP. In principle, incomes earned should equal what people spend on the goods produced. But even the best statistical agencies show a small “discrepancy” between income and expenditure. The NSO data shows much larger discrepancies, including in the latest estimate: compared to the reported income growth of 7.8 per cent, expenditure grew only 6.1 per cent—the figure that ought to have been reported as GDP growth had the NSO followed the US convention. I first highlighted this problem in September 2023, when the just-announced quarterly growth was also 7.8 per cent, but expenditure growth was only 1.4 per cent. In the furore that followed, many commentators argued that discrepancies go both ways: sometimes expenditure growth is higher than income growth. 

For more update:

Visit Us 👇

Website Link: https://statisticsaward.com/,

Nomination Link: https://statisticsaward.com/award-nomination/,

Registration Link: https://statisticsaward.com/award-registration/,