The Ministry of Statistics and Programme Implementation (MoSPI) released India’s Gross Domestic Product estimates for the first quarter of 2026–27 with real growth of 7.8% under the 2022–23 base year. On 2 September 2026, MoSPI issued a clarification on the negative 1.5% implicit Gross Value Added deflator in manufacturing and on the use of the double-deflation method in national accounts.
Gross Domestic Product and Gross Value Added
Gross Domestic Product measures the market value of all final goods and services produced within a country during a specific period. Gross Value Added measures the value added by each sector and is used in India’s national accounts to estimate sectoral output.
India’s GDP series uses a base year for price and volume comparisons, and the 2022–23 base year replaced the earlier series in the revised estimates. A base year is a reference year used to construct constant-price estimates and inflation-adjusted growth rates.
Double-Deflation Method in National Accounts
Double deflation is a standard national accounts method recommended by the International Monetary Fund. Under this method, output and intermediate consumption are deflated separately to derive real GVA.
In manufacturing, nominal GVA grew by 7.7% in Q1 FY27, while real GVA grew by 9.2%. The negative implicit deflator of 1.5% arose because input prices, including basic metals, textiles, and rubber, rose faster than output prices.
GDP Deflator and Price Indices
The GDP deflator is a broad measure of price change across the economy and differs from consumer price inflation and wholesale price inflation. India’s Q1 implicit GDP inflation rate of 2.5% covers more than 300 individual deflators across sectors.
Consumer Price Index inflation and Wholesale Price Index inflation measure different baskets and cannot be directly compared with the GDP deflator. CPI tracks retail prices paid by households, while WPI tracks prices at the wholesale level.
Important Facts for Exams
- The Ministry of Statistics and Programme Implementation is the nodal ministry for official statistics in India.
- The IMF recommends double deflation for measuring real Gross Value Added in national accounts.
- The 2022–23 base year is used for India’s revised GDP series.
- The GDP deflator is broader than the Consumer Price Index and the Wholesale Price Index.
Revisions in National Accounts
Revisions in GDP series occur when a new base year, updated administrative data, and improved compilation methods are introduced. The downward revision of Q1 FY26 GDP from ₹86.05 lakh crore to ₹80.32 lakh crore was linked to the shift to the 2022–23 base year and updated data.
