Why India’s strong GDP growth is raising eyebrows
Summary
India’s stronger-than-expected 7.8% GDP growth has triggered debate over whether official figures overstate the economy’s performance, with critics questioning the deflator and the government’s revised methodology. The dispute has turned political as Narendra Modi’s government defends the numbers while economists point to mixed signals from jobs, investment and inflation.
Key Points
- India reported 7.8% GDP growth in the June quarter, beating forecasts and fueling debate over the accuracy of the official numbers.
- Subhash Chandra Garg and Raghuram Rajan questioned whether the growth figure was inflated by methodological changes and a low deflator.
- The Indian government defended its revised GDP methodology and said the new series better reflects economic conditions.
- Economists remain divided, with some indicators strong but others, such as PMI readings, showing weaker momentum.
