State Bank of India's research arm, Ecowrap, has vehemently defended India's 7.8% GDP growth rate, criticizing what it termed "intellectual poseurs" for spreading a "rancorous story" about the nation's economic data. The report directly addresses concerns regarding alleged discrepancies and revisions in GDP figures.
The "Missing Funds" Controversy
The controversy stems from statements made by former finance secretary Subhash Garg, who suggested a "missing ₹6 lakh crore" in nominal GDP, arguing that the actual growth rate should be closer to 2.6% rather than the officially reported 7.8%. SBI Ecowrap labeled these claims as "frivolous" and a "badly scripted piece of fiction devoid of any logic," accusing critics of "intellectual dishonesty."
Clarifying GDP Revisions and Methodology
Ecowrap's report clarified that GDP data undergoes regular revisions, noting 239 revisions over 70 quarters, with 134 being upward and 105 downward. It emphasized that these revisions are random and lack a set pattern. The report also highlighted significant nominal GDP revisions in recent quarters, specifically ₹41.8 lakh crore over 14 quarters (Q1 FY23 to Q2 FY26), compared to ₹10.1 lakh crore over 56 quarters preceding FY23 Q1.
Regarding methodology, SBI Research pointed to a new approach incorporating sectoral composition changes. It noted that 95% of the revision was concentrated in sectors like Trade, Hotels, Transport, and Communication (a negative revision of ₹39 lakh crore), while Finance, Insurance, Real Estate, and Business Services saw a positive revision of ₹13.6 lakh crore. This, according to the report, reflects a better mapping of economic activity, particularly within informal and unincorporated sectors, utilizing refined measurements from ASUSE and PLFS information previously unavailable.
The report also posited that the significant decline in nominal GDP alongside a large increase in real GDP indicates enhanced purchasing power, as overall price levels decreased faster than the physical output grew.
Transparency and Leading Indicators
SBI Ecowrap asserted that sufficient public data is available to construct reasonable proxies consistent with the underlying methodology, directly refuting commentary from economists who have held respected government positions. Their analysis showed a 3.7% GVA deflator, closely aligning with MoSPI's estimate of 3%.
Furthermore, the report cited consistent performance of key high-frequency indicators, which have supported GDP growth rates exceeding 7% since FY23. It concluded by stating that casting doubts on GDP data is akin to questioning the qualifications and integrity of the expert committees responsible for its compilation.