'Fictional, loose figment of irrational tit-bits': SBI report refutes claims of missing nominal GDP data

The SBI Ecowrap report asserts that criticisms of GDP adjustments are based on incorrect statistical comparisons.AI Quick ReadThe narrative surrounding the supposed missing sums in the national accounts is a badly scripted piece of fiction devoid of any logic, according to the latest research report from SBI Ecowrap.

The report stated that criticisms questioning adjustments in nominal Gross Domestic Product (GDP) during recent quarters stem from an incorrect comparison of distinct statistical series. It addresses the economic debates emerging after the recent declaration of first-quarter GDP growth at 7.8 per cent.

"Some stories are seeped in facts, while some are entirely fictional, a loose figment of irrational tit-bits of imagination stitched haphazardly," the report stated.

"The rancorous story being peddled by some Intellectual poseurs, bordering charlatanism, notably that of The 'missing' ₹6 lakh crore / ₹42 lakh crore in Nominal GDP during Q1 FY26/ Q1FY23-Q2 FY26, is a badly scripted piece of fiction devoid of any logic," the SBI report said.

Earlier, former Finance Secretary Subhash Chandra Garg, speaking to a business TV news channel, had questioned the reported 7.8 per cent GDP growth in Q1 FY27, pointing out that last year’s current-price GDP had been revised from around ₹86 lakh crore to ₹80 lakh crore. He argued that without this revision, the growth at current prices would have been around 2.6 per cent.

According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s real GDP grew 7.8 per cent year-on-year in Q1 FY27. Real GDP at constant prices was estimated at ₹81.36 lakh crore, compared with ₹75.46 lakh crore in the same quarter of FY26. Nominal GDP grew 10.3 per cent year-on-year.

The SBI report noted that revisions remain a normal statistical practice when a reference year changes. An examination of data revealed 239 revisions across 70 quarters starting from FY09, with 134 upward adjustments and 105 downward adjustments. The extent of these changes showed no set pattern across political administrations.

The report explained the sectoral drivers behind the downward adjustments in Gross Value Added (GVA) following the adoption of FY23 as the base year, stating: "95 per cent of the revision is largely concentrated in Trade, Hotels, Transport and Communication (-39 lakh crore), while Finance, Insurance, Real Estate and Business Services record a positive revision of 13.6 lakh crore."

"The contrasting movement can therefore be viewed as a significantly better mapping of the composition of economic activity across informal/unincorporated sectors using ASUSE and PLFS with a granularity, instead of using proxy indicators for mapping informal sector in the regime before FY23," the report added.

Without the trade and transport sub-sector, the overall revision dropped to ₹2.1 lakh crore. The subsequent shift toward finance and related formal activities reflected wider formalisation and financialisation through increased banking penetration and digital payments.

Addressing queries on deflator construction, the research noted that publicly accessible indicators sufficiently replicate official indices. The report’s reconstructed sector deflators closely aligned with official estimates. It recorded industry deflator figures alongside an overall GVA deflator estimate of 3.7 per cent, which compares closely with the official 3 per cent figure.

Economic indicators continued to support growth rates exceeding 7 per cent since FY23, with private investment averaging ₹3.5 lakh crore annually.

“Through this exercise, we have shown that with the availability of publicly accessible price and volume indicators, the broad contours of the new deflator methodology can be replicated, and the resulting estimates are closely aligned with the MoSPI-implied rates across sectors,” the report stated.

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