What Happened: The growth of India's gross domestic product was overstated by about 2.5 percentage points each year from fiscal 2011/12 to 2016/17, Arvind Subramanian, the former chief economic adviser for Prime Minister Narendra Modi, wrote in an op-ed published June 12 in The Indian Express. Subramanian said his research shows that actual annual GDP growth during the fiscal years that began April 1, 2011, and ended March 31, 2017, was 4.5 percent — not the 7 percent often cited when India is described as one of the world’s fastest-growing major economies.
Why It Matters: While allegations questioning the veracity of India’s GDP data are not new, it’s notable that the government’s former top economic adviser is now casting doubt on the growth numbers. From Subramanian’s viewpoint, the inaccurate GDP figures may have reduced the urgency for economic reform. They certainly highlight the difficulty of assessing the true extent of growth in India's $2.6 trillion economy.
Background: In 2012, under India's previous government, the Ministry of Statistics changed the methodology it uses to measure GDP. The ministry defended its data against Subramanian's op-ed, saying its figures are objective and based on accepted procedures.