Arun Kumar
01/12/2025
https://thewire.in/economy/is-indias-q2-gdp-surge-believable
We need to look closely at what has forced the IMF to acknowledge the lack of reliability of Indian GDP data.
In its 2025 Article IV Consultation Report on India, IMF has given a ‘C’ for assessment of quality of data used for national accounts. The rating is mentioned in Annex VII on Data Issues (page 66). What does a ‘C’ imply?
“The data provided (by India) to the Fund have some shortcomings that somewhat hamper surveillance”.
In plain terms, it means that Indian official data is not up to the mark for the IMF team to come to a correct assessment of India’s GDP. This assessment is also valid for the current estimate of GDP for Q2 of 2025-26. The shortcomings pointed by the IMF team are:
- Use of an outdated base year (2011/12),
- Use of wholesale price indices as data sources for deflators due to the lack of producer prices indices,
- Excessive use of single deflation, which may introduce cyclical biases,
- At times sizeable discrepancies between production and expenditure approaches that may indicate the need to enhance the coverage of the expenditure approach data and the informal sector,
- Lack of seasonally adjusted data and room for improvement of other statistical techniques used in the quarterly national accounts compilation, and
- Lack of consolidated data on states and local bodies after 2019