Former CEA Defends India's 7.8% GDP Growth

Former Chief Economic Adviser Krishnamurthy V Subramanian has come out in defense of India's 7.8% GDP growth in the April-June 2026 quarter. He has rejected questions over the credibility of the numbers and has backed the methodology used to calculate them.

Subramanian said that India has shifted to the 'cutting edge methodology of the double deflator', which separately adjusts the prices of inputs and outputs while calculating real economic growth. He explained the method using a simple example of making khichdi, where the prices of the final product and its ingredients rise at different rates.

The double deflator method, according to Subramanian, deflates the output at the price level of the output and deflates the input at the price level of the input, arriving at real quantities. He said that this method is more accurate and provides a clearer picture of the economy.

Subramanian also rejected concerns that investment indicators were failing to keep pace with GDP growth. He pointed out that the gross fixed capital formation, which is a technical term for investment in the economy, has grown by 12% in the first quarter of 2026. Private capital expenditure by listed companies has also grown by 11%, while bank credit has expanded by about 20%. The Index of Industrial Production (IIP) for capital goods has increased by more than 15%.

However, Subramanian acknowledged concerns around job creation. He said that the rate of employment creation, especially in the formal sector, is not as high as the GDP growth. This is an area that needs to be addressed, he added.

The defense of India's GDP growth by Subramanian comes at a time when there are questions being raised about the credibility of the numbers. Some have pointed out that the growth rate is not reflected in the employment numbers, which have not kept pace with the GDP growth.

The Indian economy has been growing at a rapid pace, with the GDP growth rate being one of the highest in the world. The government has been taking various measures to boost growth, including increasing investment in infrastructure and reducing taxes.

In recent times, there have been debates about the methodology used to calculate GDP growth. Some have argued that the methodology is flawed and does not accurately reflect the state of the economy. However, Subramanian's defense of the methodology suggests that it is robust and provides a accurate picture of the economy.

The GDP growth rate is an important indicator of the health of the economy. It provides a snapshot of the economy's performance and is closely watched by investors, policymakers, and economists. A high GDP growth rate is generally seen as a positive sign, indicating that the economy is growing and creating jobs.

In conclusion, Subramanian's defense of India's GDP growth and the methodology used to calculate it suggests that the numbers are credible and provide a accurate picture of the economy. However, the concerns around job creation need to be addressed to ensure that the growth is inclusive and benefits all sections of society.

The Indian government has been working to boost employment and create jobs. The government has launched various initiatives, including the Make in India program, which aims to promote manufacturing and create jobs. The government has also increased investment in infrastructure, which is expected to create jobs and boost growth.

Overall, the defense of India's GDP growth by Subramanian suggests that the economy is on the right track. However, there are still challenges that need to be addressed, including the creation of jobs and ensuring that the growth is inclusive.

The GDP growth rate is expected to continue to be an important indicator of the economy's performance. As the economy continues to grow, it is expected that the growth rate will remain high, indicating a strong and healthy economy.

In the coming months, the government is expected to take further measures to boost growth and create jobs. The government has already announced various initiatives, including the reduction of taxes and the increase of investment in infrastructure. These measures are expected to boost growth and create jobs, and will be closely watched by investors, policymakers, and economists.

The defense of India's GDP growth by Subramanian is a positive sign for the economy. It suggests that the numbers are credible and provide a accurate picture of the economy. However, the concerns around job creation need to be addressed to ensure that the growth is inclusive and benefits all sections of society.

The Indian economy is expected to continue to grow at a rapid pace, with the GDP growth rate being one of the highest in the world. The government's initiatives to boost growth and create jobs are expected to pay off, and the economy is expected to remain strong and healthy.

In conclusion, the defense of India's GDP growth by Subramanian is a positive sign for the economy. It suggests that the numbers are credible and provide a accurate picture of the economy. However, the concerns around job creation need to be addressed to ensure that the growth is inclusive and benefits all sections of society.