New Delhi: The International Monetary Fund (IMF) has backed India’s revised Gross Domestic Product (GDP) calculation methodology, describing the changes as a welcome development that aligns with established statistical practices and recommendations provided by the organisation.
The IMF’s Asia and Pacific Department Director, Krishna Srinivasan, said India’s updated methodology was consistent with advice from the IMF’s statistics department. He also acknowledged the efforts made by the Ministry of Statistics and Programme Implementation (MoSPI) to improve the quality of the country’s economic data.
Srinivasan noted that India had published an explanatory note outlining the changes introduced in its GDP calculation process. While further improvements remained possible, he said the revisions represented a positive step towards strengthening the country’s economic statistics.
The IMF official also addressed concerns surrounding pressure on the Indian rupee following the recent energy shock. He said India had faced the external challenges with strong economic fundamentals and responded effectively to the situation.
According to Srinivasan, movements in exchange rates are influenced by several global factors, including international interest rates, investor risk appetite and oil prices. He cautioned against interpreting pressure on the rupee as evidence of a disconnect between currency movements and economic growth.
The IMF’s latest Regional Economic Outlook for Asia and the Pacific also highlighted currency pressures faced by several emerging economies following the energy shock. India was among the countries that intervened in foreign exchange markets, while some of the pressure had eased in recent months.
India’s revised GDP methodology has come under scrutiny following the release of stronger than expected economic growth figures. The government reported GDP growth of 7.8 per cent for the June quarter, prompting a political debate over the reliability of the numbers.
Former Finance Secretary S C Garg questioned the figures, alleging that the reported growth had been inflated by reducing estimates for the previous year. Opposition parties subsequently raised concerns about the credibility of the government’s economic data.
Chief Economic Advisor V Anantha Nageswaran rejected Garg’s interpretation, accusing him of selectively using data to support his argument.
The government has explained that the latest GDP estimates incorporate a revised base year of 2022 to 2023, replacing the earlier reference period. The methodological changes also resulted in revisions to quarterly GDP figures for the previous financial year.
The IMF’s endorsement adds international support for India’s updated statistical framework as the debate over the country’s economic performance continues.
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