SBI has rejected the claim that India’s nominal GDP growth in Q1 FY27 was just 2.6% and that the figure is based on comparing the GDP estimate with an outdated and unrevised base. The bank said the appropriate comparison indicates nominal GDP growth of 9.7%.
The State Bank of India (SBI) has strongly rejected claims that India’s nominal GDP growth in the first quarter of financial year 2026-27 was only 2.6%. In a recent report, the country’s largest lender argued that the much-talked about figure is based on an incorrect comparison between different versions of GDP data.
According to SBI, the 2.6% figure is revealed when the latest nominal GDP estimate of Rs 88.3 lakh crore for Q1 FY27 is compared with an older and unrevised estimate of Rs 86.1 lakh crore for Q1 FY26. The bank said such a comparison does not give an accurate picture of the economy’s growth because the base-year data has subsequently been revised.
SBI said the comparison was “completely unsolicited” and called it a “sure sign of intellectual dishonesty.” GDP figures from the latest series should be compared with the corresponding revised figures from the same series to get a meaningful growth estimate.
The dispute comes at a time when the economy of India is in the grip of a public debate and questions of whether GDP numbers in the headline accounts are telling the whole story of things from what is happening in India are being aired in public. Official data has shown strong economic growth but also on the employment side and the impact of economic expansion on the home front.
SBI said that the latest Q1 FY27 nominal GDP figure of Rs 88.3 lakh crore should be compared with the revised Q1 FY26 figure under the new GDP series. Based on that comparison, nominal GDP growth works out to 9.7%.
The bank also gave an alternative calculation for those who want to compare the latest figure with the previous unrevised Q1 GDP base. It argued that the appropriate comparison in that case would still require figures from the new GDP series. According to SBI, Rs 88.3 lakh crore for Q1 FY27 compared with Rs 80.4 lakh crore under the new base produces nominal GDP growth of 9.7%, instead of 2.6%.
The distinction between revised and unrevised data has become central to the debate. GDP estimates are routinely updated as more comprehensive data is available, so comparing an older estimate can produce significantly different growth rates. SBI’s argument is that using figures from different versions of the GDP series can distort the actual trajectory of nominal economic growth.
Raghuram Rajan has also come in on the debate. Rajan wondered why India is not able to generate enough jobs for young people when the country is growing so quickly. His comments have put the focus on GDP growth as well as inclusiveness and quality and diversity of growth beyond the headline GDP growth.
The former Finance Secretary Subhash Chandra Garg also raised questions about the GDP numbers. Garg questioned whether the growth rate was a reliable measure of economic activity and pointed out the problem of changing the comparison base.
The disagreement illustrates the necessity of understanding how GDP growth rates are calculated instead of just in terms of headline percentages. A growth figure may vary considerably depending on which base year, data series and revision level are used for comparison.
SBI’s latest assessment thus seeks to counter the idea that India’s nominal GDP grew by only 2.6% in Q1 FY27. But the bank also maintains that the figure is based on an apples-to-oranges comparison and the new data is far more robust.
But the debate on India’s economic performance will not end with the clarification. Questions about job creation, income growth and the capacity of economic expansion to translate into wider opportunities remain important indicators of the health of the economy. And while SBI has defended the approach to the latest GDP numbers, economists and policymakers will continue to be interested in both the headline growth rate and the impact on employment and economic activity.
Comments
Please to leave a comment on this article.