By Suresh Unnithan
Prime Minister Narendra Modi called India’s 7.8 per cent real GDP growth in April–June a “herculean feat.” Former finance secretary Subhash Chandra Garg, former RBI governor Raghuram Rajan and several private economists have since asked whether the print measures the economy households actually live in. Two official series make the gap hard to ignore: youth joblessness has been climbing through the same quarter the government is celebrating, and kitchen prices have been rising far faster than the 2.3 per cent deflator used to turn nominal growth into that 7.8 per cent.
MoSPI put real GDP at ₹81.36 lakh crore in Q1 of 2026-27, against ₹75.46 lakh crore a year earlier. Nominal GDP rose 10.3 per cent to ₹88.27 lakh crore from ₹80.00 lakh crore on the new 2022-23 series. Real GVA grew 8.2 per cent. The number beat the RBI’s 7 per cent forecast. That is the table the Prime Minister sold.
The base that shortened last year
Garg’s objection begins with a revision, not a slogan. Under the old 2011-12 series, Q1 of 2025-26 had been reported at about ₹86.05 lakh crore at current prices. After the February 2026 rebasing, the same quarter was restated at roughly ₹80 lakh crore — a cut of about ₹6 lakh crore. Compare this year’s ₹88.27 lakh crore with the unrebased ₹86.05 lakh crore, he said, and nominal growth is about 2.6 per cent; in real terms, close to zero. “If you had not revised last year’s GDP, the growth in current prices would have been only 2.6 per cent,” Garg told NDTV. Former CEA Kaushik Basu called Garg’s reading the best analysis he had heard.
MoSPI is right on one technical point: growth must be computed inside one series. SBI Research branded the mixed-series 2.6 per cent figure “intellectual dishonesty.” Officials also point to GST, bank credit and vehicle registrations. That rebuttal does not explain a 2.3 per cent GDP deflator when wholesale inflation was 9.9 per cent in June, or why last year’s comparable economy shrank on paper just as this year’s growth was being calculated.
Youth unemployment: the trend that undercuts the feat
If 7.8 per cent were feeding the labour market, the young would be the first to show it. They are not.
On the Current Weekly Status measure used in quarterly PLFS bulletins, unemployment among those aged 15–29 rose from 14.6 per cent in April–June 2025 to 14.8 per cent, eased to 14.3 per cent in October–December, then climbed to 15.0 per cent in January–March 2026 and 15.9 per cent in the very quarter now billed as a herculean expansion. Female youth unemployment hit 19.6 per cent in April–June 2026; urban youth joblessness was 18.2 per cent. The monthly series put youth unemployment at 16.2 per cent in June — the highest since that series began. Overall unemployment for those 15 and above was 5.4 per cent in Q1 and 5.1 per cent in July. A degree does not insulate the wait: educated unemployment remains several times the rate for the non-literate.
The annual “usual status” rate for youth was 9.9 per cent in 2025, down from 10.3 per cent in 2024. That longer-horizon measure is what the government cites in Parliament. It does not cancel the weekly-status climb through 2026, nor the fact that India still adds roughly eight million people to the labour force each year. Rajan’s question sits on this pile: “If we’re growing so fast, why aren’t we creating more jobs? More good jobs?” He later said he had neither certified nor rejected the print, but that he had puzzled over why strong GDP was not showing up in private investment, FDI or decent work.
Prices the deflator does not see
Households do not eat a 2.3 per cent deflator. Retail inflation rose to 4.45 per cent in July, a 19-month high, from 4.38 per cent in June. Food inflation, on the consumer food price index, rose to 5.52 per cent from 5.32 per cent. Onion inflation jumped to 22.54 per cent from 4.73 per cent in June. Ginger rose 83.62 per cent, garlic 35.36 per cent, chicken about 19.6 per cent, refined oil 13.35 per cent. Potato and tomato were cheaper on a year-on-year basis; that did not rescue the thali. Crisil estimated the cost of a home-cooked non-vegetarian thali up 9 per cent in July, with onion about 20 per cent higher, vegetable oil 11 per cent and LPG cylinders 10 per cent — the last two tied to energy shocks from West Asia. The RBI has left the repo rate at 5.25 per cent and expects retail inflation to average 4.7 per cent in July–September and 5.9 per cent in October–December.
A deflator of 2.3 per cent against ~10 per cent wholesale inflation and 5.5 per cent food inflation is how real GDP can look strong while real purchasing power does not. Price rise does not “cancel” recorded output. It does shrink what that output buys, and it is why a 7.8 per cent headline can coexist with weaker household demand — the same demand Rajan says is not pulling private capex.
Did the bureaucracy dress the number for the Prime Minister?
There is no public order instructing MoSPI to hit 7.8 per cent. Rebasing is normal. Quarterly estimates are revised. Calling the print a wholesale forgery outruns the evidence.
What the record shows is a convenient sequence. The new series lowered year-ago nominal GDP by about ₹6 trillion. The chosen price adjustment ran far below WPI and kitchen inflation. Youth joblessness rose through the celebrated quarter. The first, most provisional estimate was then converted, at the political apex, into a national triumph. A statistics office does not have to forge a cell for a government to oversell a table. It only has to change the base, apply a soft deflator, and leave jobs and the thali in the footnotes.
Garg’s mixed-series 2.6 per cent is not a substitute official rate. A 2.3 per cent deflator in a high-WPI, rising-food quarter is not a convincing price adjustment. The youth-unemployment climb from 14.6 per cent to 15.9 per cent (CWS) across one year is not a rounding error. The 7.8 per cent will be revised. The queue outside the employment exchange, and the bill at the vegetable cart, will not disappear with the next press note.
