New Delhi, September 8 (Daily Kiran) : SBI Research released a report on September 8, 2026, criticizing the recent nominal GDP estimates for the first quarter of fiscal year 2026. The report claims that the figures, which suggest a reduction of ₹6 lakh crore and a total decline of ₹42 lakh crore between the first and second quarters of fiscal year 2026, resemble “a story written without rationale.”
Dr. Soumya Kanti Ghosh, the Group Chief Economic Advisor at the State Bank of India, emphasized the need for a thorough discussion on four critical questions following the announcement of a 7.8% GDP growth rate. These questions revolve around significant changes in nominal GDP, detailed sector-wise impacts of these declines, the unexpectedly low deflator, and why the current high figures of WPI and CPI differ so greatly from the first quarter of fiscal year 2027.
Dr. Ghosh pointed out that the perception of a 7.8% GDP growth does not align with key indicators, which do not suggest sustained economic strength, especially as private investment lags behind.
The World Bank suggests that applying a new reference year for constant-price series may necessitate substantial adjustments in national accounts. India has a history of changing GDP base years, including fiscal years 2005, 2012, and most recently, 2023.
The report indicated that since fiscal year 2009, there have been 239 adjustments across 70 quarters, with 134 upward revisions and 105 downward ones. This inconsistency highlights a lack of a fixed pattern in changes throughout various political administrations.
Furthermore, the report noted that from the first quarter of fiscal year 2023 to the second quarter of fiscal year 2026, nominal GDP adjustments have totaled ₹41.8 lakh crore over 14 quarters. In contrast, the preceding 56 quarters saw adjustments of only ₹10.1 lakh crore. The report questioned the reasoning behind this discrepancy.
The researchers believe that the answers to these questions lie in the new calculation methods introduced with the 2023 base year. For instance, GVA has been adjusted down to ₹41.1 lakh crore under the new series, but the breakdown by sector is deemed more critical than the overall figure.
The majority of the reduction—95%—is attributed to sectors such as trade, hotels, transport, and communication, which saw a decline of ₹39 lakh crore. Conversely, finance, insurance, real estate, and business services experienced an increase of ₹13.6 lakh crore.
The report suggests that these sector-specific changes reflect a more accurate mapping of economic activities in the informal sector, utilizing detailed data from ASUSE and PLFS, as opposed to previous reliance on proxy indicators. In sectors like trade and associated services, the significant presence of informal enterprises allows for a more precise measurement when incorporating direct data. Meanwhile, in finance and related formal sectors, corporate and administrative data enhance understanding and distribution of activities.
The report concludes that prior adjustments in base years did not clearly reflect these dynamics, and excluding these sub-sectors would reduce total changes to just ₹2.1 lakh crore.
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