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The Ministry of Statistics and Programme Implementation issued a clarification on 2 September 2026 defending its Q1 FY27 GDP estimates against claims that growth had been inflated by data revision.
India's real GDP grew 7.8% in the first quarter of 2026-27 under the new 2022-23 base-year series.
Manufacturing recorded a negative implicit GVA deflator of 1.5% because input prices rose faster than output prices: nominal GVA grew 7.7% while real GVA grew 9.2%.
MoSPI attributed this to the double-deflation method, recommended by the International Monetary Fund, under which output and intermediate consumption are deflated separately.
The ministry said the fall in the Q1 FY26 estimate from Rs 86.05 lakh crore to about Rs 80 lakh crore came from successive revisions - the change of base year, better data sources and updated IIP and PPI series - and not from manipulation.
Gross Value Added is output minus intermediate consumption - what a producer sells minus what it bought to make it. To convert that from current prices to constant prices you must remove price change. Single deflation applies one price index to the GVA figure as a whole, effectively assuming input and output prices move together. Double deflation deflates the two sides separately: output with an output price index, intermediate consumption with an input price index. When input prices rise faster than output prices, as they did in Indian manufacturing in Q1 FY27 with basic metals, textiles and rubber leading, real GVA can grow faster than nominal GVA. The implicit deflator, which is simply nominal divided by real, then turns negative even though no price actually fell. Double deflation is the method the International Monetary Fund recommends, and India moved to it with the new series.
Simple Analogy: Measure a shop's real progress by counting what it makes and what it consumes at their own prices, not by deflating the profit line with a single average price.
| Measure | What it covers | Key point |
|---|---|---|
| Implicit GDP deflator | All final goods and services produced in the economy | Derived, not directly observed - nominal GDP divided by real GDP; Q1 FY27 value 2.5% |
| Consumer Price Index (CPI) | A fixed basket of retail goods and services bought by households | The RBI's inflation target is set on CPI |
| Wholesale Price Index (WPI) | Prices of goods at the wholesale stage, excluding services | No services coverage, so it moves differently from CPI |
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Output minus intermediate consumption; the value added by a sector, and the building block from which GDP is assembled.
Nominal value divided by real value, expressed as an index; it is derived from the two series rather than measured directly.
Deflating output and intermediate consumption with separate price indices to arrive at real GVA; recommended by the IMF.
The reference year whose prices are used to construct constant-price estimates; India's revised series uses 2022-23.
Goods and services used up as inputs in the process of production, as distinct from capital assets.