Key Points:
Former Finance Secretary Subhash Chandra Garg questioned India’s 7.8% first-quarter GDP growth, arguing that the revision of last year’s GDP figures makes the current growth rate appear stronger.
Garg said government capital expenditure and GFCF growth remain strong, but revised consumption data shows negative growth, which he says reflects weakness in people’s spending.
Garg called for the government to recognise the underlying economic situation and undertake reforms
A NEW DEBATE has started over the government’s claim of 7.8% GDP growth in FY27. On August 31, 2026, the Ministry of Statistics and Programme Implementation (MoSPI), in a press release, announced the quarterly estimates of Gross Domestic Product (GDP) for the first quarter of fiscal year 2026-27. According to the data, India’s real GDP is estimated to have grown by 7.8% in FY 2026-27, compared with 6.9% growth in FY 2025-26.
This discussion took a new turn because of the claims made by former Finance Secretary of India Subhash Chandra Garg. In an interview with NDTV, he was asked about India’s economic data and the 7.8% growth estimate, which shocked even the RBI as the agency was projecting 7%. He said that instead of just looking at the surface, we need to find out about the reality. According to him, the figures are looking good because the government revised down last year’s figures.
Subhash said, “Last year's GDP growth in the first quarter was also 7.8 percent, which is claimed for the current year as well. Last year's GDP has been revised down to 6.9 percent. So if you revise the last year's GDP, down from what was claimed last year, this year goes up.” According to him, this doesn’t completely explain what has happened.
He further went on to explain to the NDTV anchor, Gaurie Dwivedi, and said that GDP is calculated at current prices, and this leads to the main point. “And that is where I would point out one number which I think everyone is missing out so far. The current price's GDP last year was 86 trillion rupees. This has been revised down to 80 trillion rupees. ” he said.
He further stated that the government revised last year’s GDP by as much as 6 trillion rupees and this is why the current year’s GDP has gone up. He claimed that if this wasn’t done, the GDP growth would have fallen to 2.6%. “If you had not revised the last year's GDP, the growth in current prices would have been only 2.6 percent,” he claimed.
Upon this, the anchor tried to clarify, “Surely you're not hinting that numbers get revised down so that they look better, right?” to which Chandra replied that he is saying exactly that.
The anchor then went on and tried to explain to Chandra, who was a Finance Secretary in 2019, about the sanctity of the data released by the government. Chandra said that both last year’s data and this year’s data were released by the government, and the government made similar claims both years. He questioned, “What has made the government revise the last year's current prices data so drastically?” He added that we need to do a thorough analysis of why the government revised down the current GDP.
The anchor then talked about the capital investment by the government in infrastructure like roads, bridges, ports, etc., to which Garg agreed. He said that this information is reflected in the GFCF (Gross Fixed Capital Formation), which is showing around 20% growth this year, and as the capital expenditure was genuine, even if last year’s numbers are taken, the growth is still 15% plus. He said hence, on the capital expenditure front, there is no problem.
He then pointed out people’s consumption, which according to him was a concern. Garg said, “The consumption has been revised so drastically that if you compare it with the last year's consumption number, which the government put out, there is a negative growth of consumption. That is what is reflected in the current year's reality, that the consumption of the people actually is going down.”
After that, the anchor started to counterpoint Chandra and said that he is negating all the data provided by the government. She said, “You are negating every data that is there, you know, as far as the economy is concerned, one of the most important set of data is also about consumption, about how much of your fast moving capital goods is being sold, whether it is cars, whether it is several other parameters, all of them have shown substantial double digit growth.”
She then went on to ask the final question, where she asked him what should be the first key policy measures that can be taken by the government to sustain “the kind of growth” that’s seen in the first quarter.
Despite all this, Garg stuck to his ground and replied that the government first needs to recognize, “the reality of Indian economic situation, that there is no real growth, then take the right reform measures.”
He said that instead of adjusting the numbers one way or the other, the government needs to work on its policies and undertake reforms. Garg also wrote an article for news agency The Quint, where he mentioned that similar things were done last year to show the development. The 2023-24 GDP current prices data was revised by as much as Rs 11.4 trillion when the new series of GDP data was released.
In the article he wrote, “The method is simple. Revise down the GDP of the year gone by to show the present year’s performance in much better colours. No one cares to see this revision of last year’s numbers, is the time tested belief.”
Many reacted to this exchange on live TV, including politicians, political activists, economists, and others. A video of Raghuram Rajan, the former RBI governor, is also widely shared on social media by activist Prashant Bhushan, the Congress X account and others. In the video, he can be seen talking about the issues that India is facing, and he pointed out that the main issue is job creation.
He said that we need to worry about creating new jobs and question how to create more good jobs, and think about why investments are not taking place, why industrialists are reluctant to invest and why no FDI is coming. He said, “I think the more important question to ask is the following. Forget the growth numbers, who cares about them? Are we doing what is necessary to create jobs, good jobs?”
The account of Congress Sevadal also shared the video of NDTV and wrote, “Subhash Chandra Garg, the former Finance Secretary of the Modi government, has questioned the 7.8% GDP claim. What is the truth? Not 7.8%, just 2.6 % ! Data manipulation cannot change the economic reality. Stop misleading the country in the name of GDP . Falsehood cannot be transformed into truth by playing with data!”
One person wrote on social media, “This is torture on live TV. If @Subhashgarg1960 [Subhash Chandra Garg] had thrown any more facts at her - this @ndtv intern-anchor would have burst out in tears. Imagine, trying to counter the former Finance Secretary, by lecturing him on the 'sanctity' of Govt numbers.”
Another wrote, “Trying to defend PAW-PAW, but Subhash Garg Ji smashes her agenda to the ground every time and crushes it mercilessly.”
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