SBI Report Dismisses Lower Growth Claims Based on Mismatched GDP Series
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India’s economy posted a strong 7.8% real expansion and 10.3% nominal increase in Q1 FY27, as per an SBI Research report issued on Wednesday.
Key Takeaways
- SBI Research says India’s economy grew 7.8% in real terms and 10.3% in nominal terms in Q1 FY27, dismissing claims of a growth slowdown.
- The dispute arose after the NSO’s GDP revision, using a new base year, cut the nominal GDP estimate for Q1 FY26 to about Rs 80 lakh crore from Rs 86.1 lakh crore.
- SBI Research says comparing the new Q1 FY27 data with the outdated Q1 FY26 base-year figures is misleading.
- Once the revised base is applied consistently, nominal GDP growth works out to about 9.7% and real GDP growth to about 7.4%, close to the official figures.
The analysis responded to the discussion triggered by the National Statistical Office’s updated GDP release, which introduced a new base year and revised historical numbers.
SBI Research argued that questioning the growth figure by mixing different GDP series is misleading, calling the assertion of merely 2.6% nominal growth erroneous because it juxtaposes data from distinct base years.
The dispute originated when the NSO’s revision reduced the nominal GDP estimate for Q1 FY26 to roughly Rs 80 lakh crore, down from the earlier Rs 86.1 lakh crore calculated under the previous base.
The SBI note highlighted that certain analyses erroneously juxtaposed the fresh Q1 FY27 numbers with the outdated Q1 FY26 figures without correcting for the base‑year shift.
When the revised base is applied uniformly, nominal GDP growth works out to about 9.7%, which is near the official 10.3% figure, while real GDP growth comes to roughly 7.4%.
The report stressed that GDP revisions are routine, part of the statistical workflow aimed at improving accuracy as new data become available.
SBI Research clarified that updating the base year aligns price indices, output measures, and GDP deflators more consistently, and also enhances transparency by refreshing both historical and current series.
It added that the Q1 FY27 GDP estimates will be firm only after several revision cycles, expected to conclude around February 2029, as further information is integrated.
The study dismissed the idea that the latest base‑year adjustment inflated India’s economic size, noting that the revision actually lowered the nominal GDP estimate relative to the earlier figure.
Finally, SBI Research observed that historical GDP data are routinely revised upward or downward, reflecting the evolving nature of economic measurement.
