The Gross Domestic Product or GDP growth rate for quarter two of 2025-2026 has come at a whopping 8.2% – which is a six-quarter high – much faster than experts expected. The Reserve Bank of India had also expected a growth rate of 7%. This is surprising because the expected GST reduction impacted production and consumption of various items in August-September. The demand boost came after September 22 – which left just a week before the close of Q2. Reports have come in of many investment projects being withdrawn or curtailed and of net FDI becoming negative. These are not the signs of a robust economy.

IMF pronouncement

The same day, a shocker came from the International Monetary Fund. In its 2025 Article IV Consultation Report on India, it 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:

These points have been raised by several analysts since demonetisation in November 2016, followed by faulty Goods and Services Tax rollout in 2017, the non-banking financial company (NBFC) crisis in 2018 and the pandemic in 2020.

Base-year issue

While the IMF has raised the issue of outdated base year, the problem is deeper. The series for GDP with base year 2011-12 announced in 2015 faced several criticisms: 

Other data issues

The base year issue is also flagged by the IMF report for the Consumer Price Index (CPI). The basket used in its calculation is........

© The Wire