India’s GDP, other national accounts data given ‘C’ grade by IMF

The International Monetary Fund has given India's national accounts statistics, which include data such as the Gross Domestic Product and the Gross Value Added a “C” grade, which is the second-lowest rating.

The international financial institution said in its annual review that the low grade means the available data has “some shortcomings that somewhat hamper surveillance”.

The United Nations agency said in its annual assessment of India's economic framework that “national accounts data are available at adequate frequency and timeliness and provide broadly adequate granularity”.

“However, some methodological weaknesses somewhat hamper surveillance and warrant an overall sectoral rating for the national accounts of C,” it added.

The main methodological problems were related to coverage, including an outdated base year of 2011-'12, according to the report.

The use of wholesale price indices as data sources for deflators because of the lack of producer price indices, and excessive use of single deflation, may introduce cyclical biases, the assessment found.

A deflator is a statistical tool that measures the changes in the average price for goods and services produced in an economy. It is used to remove the effects of inflation from economic data.

At times, there were “sizable discrepancies” between the production and expenditure approaches, which may indicate the need to enhance the coverage of the expenditure approach data and the informal sector, the report published this month added.

The assessment also pointed to the lack of seasonally-adjusted data and “room for improvement of other statistical techniques” used in the quarterly national accounts compilation.

“On granularity, further breakdown of Gross Fixed Capital Formation by institutional sector (published with a significant lag) and further disaggregation of the quarterly production and expenditure approach estimates would allow for a more detailed analysis of economic trends,” it added.

India's overall grade was “B” based on other parameters: prices, inter-sectoral consistency, monetary and financial statistics, and statistics on government finance and the external sector.

Also read: India's data credibility problem – and why that matters

The “B” grade for the Consumer Price Index indicates that the data provided to the IMF had “some shortcomings but are broadly adequate for surveillance”.

The Consumer Price Index measures the average change in the prices of a “market basket” of goods and services purchased by a typical urban consumer.

While the index data is available at adequate frequency and timeliness, the rating granted to the coverage reflects an outdated base year, items basket and weights (2011-'12), the IMF said.

This implies that the CPI basket “likely fails to accurately represent current spending habits”, it added.

India's national accounts statistics had received a “C” grade in last year's assessment as well. The IMF said this year that “data weaknesses have remained broadly unchanged” since the previous report. However, it acknowledged that plans to upgrade the statistics “are advancing”.

The Union Ministry of Statistics and Programme Implementation is updating the Gross Domestic Product and the Consumer Price Index base years and their methodology, The Hindu reported, adding that the new series are expected to be released in early or mid-2026.

The national accounts data for the second quarter of the financial year 2025-'26 will be released on Friday.

Source: Scroll
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