India GDP Growth: SBI Responds to 2.6% Claim, Citing Incorrect Comparisons
The State Bank of India (SBI) has dismissed claims that India’s nominal GDP growth for the first quarter of FY27 was merely 2.6%. The bank stated that this figure arose from an improper comparison of different GDP data versions. This response follows former finance secretary Subhash Chandra Garg’s criticism of the government’s reported 7.8% real GDP growth for the same period.
SBI clarified that Garg’s assertion was based on a revision of the previous year’s current-price GDP. The revision adjusted Q1 FY26 GDP from approximately Rs 86 lakh crore to about Rs 80 lakh crore. Without this revision, Garg argued, nominal growth would indeed appear to be only 2.6%. However, official data from the Ministry of Statistics and Programme Implementation (MoSPI) indicated that real GDP grew 7.8% year-on-year in Q1 FY27, with nominal GDP growth reported at 10.3%.
Dispute over the 2.6% figure
The National Statistical Office (NSO) initially estimated nominal GDP for Q1 FY26 at Rs 86.1 lakh crore. However, a subsequent release on August 31 revised this figure down to Rs 80 lakh crore, using the new GDP base year of 2022-23. For Q1 FY27, nominal GDP was estimated at Rs 88.3 lakh crore. SBI argued that the 2.6% growth figure resulted from comparing this latest estimate with the older Rs 86.1 lakh crore figure for Q1 FY26, rather than the revised number.
SBI stated that the correct comparison should be between the Q1 FY27 figure and the revised Q1 FY26 figure, which would yield a nominal GDP growth of 9.7%. The bank also provided an alternative comparison for those preferring the previous unrevised base, suggesting that Rs 88.3 lakh crore for Q1 FY27 should be compared with Rs 80.4 lakh crore under the new base. This comparison would also result in a growth figure of 9.7%.
Real GDP growth would still be strong
SBI maintained that even with alternative calculations for nominal growth, the outlook for real GDP would remain positive. The bank indicated that adjusting the deflator would yield a real GDP growth of 7.4% for Q1 FY27, compared to the officially reported 7.8%. SBI noted that this figure is still robust given the various external challenges facing the economy.
The bank emphasized that GDP numbers are subject to revisions over time. Between FY22 and FY25, quarterly GDP data experienced 25 upward revisions and 12 downward revisions. SBI reiterated that the initial GDP estimates are not final and will undergo further adjustments.
Latest figures to be revised
SBI explained that the recent revisions were unique because the National Accounts Statistics incorporated updated figures from prior years directly into the quarterly data. This approach aimed to enhance transparency and align the figures with base revisions in various economic indices, including the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). SBI affirmed that this method is legitimate and helps maintain consistency in GDP deflators and volume estimates.
The bank also pointed out that the Q1 FY27 GDP estimate released in August 2026 is not final. It is expected to undergo additional revisions, with finalization anticipated by February 2029. SBI stated that revisions are an inherent aspect of GDP reporting. Furthermore, the bank rejected claims that the change in the GDP base year inflated India’s nominal GDP size, asserting that the latest base-year revision actually resulted in a lower nominal GDP size.
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