World Bank Executive Director Neelkanth Mishra defended India’s 7.8 per cent GDP growth in Q1 2026-27, rejecting claims that revisions to the base inflated the growth rate.

World Bank Executive Director for India, Bhutan, Bangladesh and Sri Lanka Neelkanth Mishra on Thursday strongly defended India’s latest GDP estimates, saying he was “shocked” by claims that the 7.8 per cent growth recorded in the June quarter was inflated because of a downward revision to the year-earlier base.

“I was shocked to see the ill-educated and egregiously wrong claims made by some that if the ‘original’ base of June-2025 quarter was used, growth in the June-2026 quarter would be much lower,” Mishra said in a statement on X.

Mishra’s comments come amid a controversy over the revised national accounts series introduced in February 2026. Former finance secretary Subhash Chandra Garg has questioned the sharp revision to the size of the economy in the June 2025 quarter and argued that the lower base could materially boost the subsequent year-on-year growth rate.

Rejecting this argument, Mishra said the new series had not simply changed the base but had “cleaned up the data” and “significantly improved the methodology”. The downward revision to the base, he said, was already known in March.

“As our note acknowledged, the new series increased credibility of estimates of real output,” he said, referring to an Axis Capital research note published on March 1, when he was with the firm.

Mishra said the latest growth numbers were also supported by a range of high-frequency indicators that, unlike GDP estimates, were difficult to manipulate.

“As expected, with the fiscal headwinds fading and monetary headwinds… becoming tailwinds, GDP growth is surprising on the upside,” he said. In his assessment, the strength of the economy should push consensus estimates of India’s trend growth to above 7 per cent. “With a neutral fiscal and monetary policy, the economy should still register 7.5 per cent growth,” he said.

He pointed to the sharp increase in vehicle sales as evidence of strengthening demand. Passenger vehicle dispatches grew 35 per cent year-on-year in August despite exports rising only 9 per cent, while two-wheeler growth exceeded 20 per cent. Commercial vehicle dispatches grew more than 40 per cent, he said.

Tax collections have also picked up meaningfully, while credit growth continues to surprise on the upside, albeit from a low base, Mishra said. Construction indicators, too, remain robust.

The comments come after the government reported 7.8 per cent real GDP growth in Q1 of 2026-27, with real GVA growing 8.2 per cent. The figures have triggered a wider debate over the credibility and interpretation of the new GDP series, particularly the revisions to earlier estimates.

Mishra also argued that evidence of stronger demand for commercial vehicles and construction activity should put to rest concerns about weak private-sector investment.

“Hopefully, now there will be fewer people asking ‘why private sector investment is weak,’ given that there is clear evidence of investments,” he said.

However, he cautioned that the economy still had some slack, citing weak real wage growth. It could take several quarters of above-trend growth for this slack to disappear and for persistent inflationary pressures to return, he said.

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