NEW DELHI: The base year revision of India’s Gross Domestic Product (GDP) series earlier this year is a “welcome development,” and the changes in methodology are in line with the International Monetary Fund’s (IMF) advice, the Fund’s Asia and Pacific Department Director Krishna Srinivasan said on Thursday.
“On the issue of GDP revision, they have revised the base and the use of PPI (Producer Price Index) and IIP (Index of Industrial Production) to revise the production side of GDP. These are welcome developments and these revisions to the methodology are entirely consistent with the advice we’ve been giving them,” Srinivasan said at a press conference.
The IMF, in its 2025 annual review, gave India’s national accounts statistics, which include GDP and Gross Value Added (GVA), a ‘C’ grade, suggesting methodological and coverage-related shortcomings.
The ‘C’ grade was for the old GDP series, which had FY12 as the base year. In February, the statistics ministry introduced the new GDP series with FY23 as the base year. The revised series incorporates new data sources, uses double deflation and the new output PPI.
“What they have done is consistent with good practices and is there room for improvement? Yes, there is always room for improvement but let’s recognise the good work done by MoSPI in improving the statistics,” Srinivasan said.
As per the new GDP series, India’s economy grew 7.8% in FY26 and in the April-June quarter. The IMF earlier this week raised its forecast for India’s GDP growth in FY27 by 60 basis points to 7%. “Q1FY27 growth came in much stronger than we had anticipated so we have revised our growth projection for this year and next year to 7% and medium-term growth to 6.9%,” Srinivasan said.
Srinivasan said that India entered the energy shock period with very strong fundamentals, which has helped the country respond well to high energy prices. “Growth was strong, fiscal prudence was enshrined and they had lots of reserves. In that context, they have responded well to the shock,” he said.
While growth has remained robust, the rupee has seen a sharp fall this year. When asked about the disconnect between growth and the rupee, Srinivasan said there wasn’t any such dichotomy. “The exchange rate should not be viewed as a barometer of economic success or failure given the multiplicity of shocks we have seen. Allowing the exchange rate to act as a buffer for shocks is very important,” Srinivasan said.
“What happens to the exchange rate is a function of global interest rates, investor risk appetite, and oil prices. And India being an oil importer has been affected by the oil shock,” Srinivasan said.
Source: The Financial Express
