India's economic growth of 7.8% for the June quarter has come under criticism following allegations from a former government official that the figures have been artificially inflated. Subhash Chandra Garg, who served as finance secretary from 2017 to 2019, claimed that the GDP for the April-June quarter of 2025 was revised downward by 6 trillion rupees ($63.5 billion), reducing the prior year’s GDP to 80 trillion rupees. This alteration, he argues, enhances the year-over-year comparison with the latest GDP figure of 88.27 trillion rupees.
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In response to these claims, V Anantha Nageshwaran, India’s chief economic advisor, labeled Garg's analysis as "cherry-picking" data. He clarified that the new GDP figures were calculated using a financial year ending in March 2023 as the base year, which involved revising last year's quarterly data based on a new methodology. Nageshwaran stated that while some quarterly numbers might be raised or lowered in revisions, the focus should be on the consistency of the data.
Garg emphasized that the government's explanations did not clarify the reasoning behind the significant reduction in last year's GDP. Political opposition, including the Indian National Congress party, supported his claims, stating that GDP had been revised down by 43 lakh crore ($455 billion) over the past four years, suggesting that an excess of goods and services had previously been included in the GDP metrics.
Commerce Minister Piyush Goyal defended the reported growth, asserting that India's 7.8% increase is genuine. The International Monetary Fund (IMF) had previously raised concerns about the accuracy of Indian economic data, assigning it a "C grade," the second-lowest rank. To address these issues, including the reliance on outdated methodologies and wholesale price indices, India adopted a new statistical framework in February.
Experts have debated Garg's claims, indicating that his approach compares figures from differing base years, which may render his arguments technically flawed. However, some, like Anil Sood from the Institute of Advanced Studies in Complex Choices, noted worries about estimation errors in historical data.
According to Anubhuti Sahay from Standard Chartered Bank, while the updated methodology supports better GDP figures, it’s essential to recognize that the current growth metrics also reflect real economic activity. High-frequency indicators suggest that, despite global challenges such as energy price fluctuations, India's economy remains resilient. However, she cautioned that growth is inconsistent and not uniformly beneficial, highlighting the potential challenges posed by geopolitical risks and the impact of El Nino on rural sectors.
Global brokerages, including Morgan Stanley and Citi, project a softer growth forecast of 7.3% for the year ending in March 2027, with June quarter growth primarily fueled by a rise in investments and exports, while household consumption showed only modest improvements.