‘Missing’ Rs 6 Lakh Crore in GDP Is Fiction, Says SBI Research

The rancorous story being peddled by some intellectual poseurs, bordering charlatanism, notably that of the ‘missing’ Rs 6 lakh crore in nominal GDP during Q1 FY26 or Rs 42 lakh crore in Q1 FY23-Q2 FY26 period is a badly scripted piece of fiction devoid of any logic, an SBI Research report said on Tuesday. SBI Research said that it was one of the few firsts, in its report dated September 2, 2026, to highlight that comparing two altogether different base year series was “frivolous and a sure sign of intellectual dishonesty”.

“Four questions, political as also economic, have emerged post the declaration of Q1GDP numbers at 7.8 per cent that we believe may require a broad discussion,’ said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India. First, the discussion on large revisions in nominal GDP. Second, the breakdown of such downward revisions mapped to sectors. Third, why the deflator is so low and is in complete contrast to high WPI and CPI numbers during Q1FY27. “Fourth, one does not feel the 7.8 per cent GDP growth and the leading indicators are not even tracking a buoyant GDP over a longer period with private investment still a laggard,” Dr Ghosh said. Firstly, as per World Bank, larger revisions in national accounts may be needed when a new reference year for constant-price series are introduced. Since India has a history of GDP base year revisions in FY05, FY12 and most recently FY23, “we find there are 239 revisions beginning FY09 over 70 quarters of which 134 has been in upward direction and 105 in downward direction,” said the report.

Clearly, the extent of revisions is random and has absolutely no set pattern across any political regime as is now being claimed. “However, in terms of change in nominal GDP, the 14 quarters beginning Q1FY23 and ending Q2FY26 was witness to Rs 41.8 crores revision, while the 56 quarters preceding Q1FY23 revealed a revision of a lesser magnitude of Rs 10.1 lakh crore. Why this difference?” The report argued. Secondly, “we believe the answer to the question above lies in the new methodology that was rolled out with FY23 as the base year”. For example, the downward revision in GVA under the new series stands at Rs 41.1 lakh crore for Q1 FY23–Q2 FY26, but its sectoral composition is more revealing than the aggregate itself.

Ninety-five per cent of the revision is largely concentrated in Trade, Hotels, Transport and Communication (−Rs 39 lakh crore), while Finance, Insurance, Real Estate and Business Services record a positive revision of Rs 13.6 lakh crore. “The contrasting movement can, therefore, be viewed as a significantly better mapping of the composition of economic activity across informal/unincorporated sectors using ASUSE and PLFS with a granularity, instead of using proxy indicators for mapping informal sector in the regime before FY23,” the report explained.

The report further said that trade and related services have a substantial presence of unincorporated enterprises, where the incorporation of direct ASUSE and PLFS information provides a more refined measurement, while the richer corporate and administrative data improve the capture and allocation of activity in Finance and related formal-sector services. This was clearly absent in the earlier base year changes and sans this sub-sector the overall change drops to mere Rs 2.1 lakh crore, said the report.

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