India’s reported 7.8 per cent real GDP growth in the April–June quarter of 2026 has triggered debate over how fast the economy is growing and how that growth is being measured. Nominal GDP grew by 10.3 per cent while real GDP grew by 7.8 per cent, implying a GDP price deflator of roughly 2.5 per cent. This is below CPI inflation of about 3.9 per cent and WPI inflation of more than 9 per cent. Although these are conceptually different measures, the divergence deserves scrutiny.
Nominal GDP: The total monetary value of all goods and services produced at current market prices, which includes the effects of inflation
.Real GDP: The total value of goods and services adjusted for price changes by using the prices of a specific base year.
Price changes are not measured by the wholesale price index or consumer price index based inflation but GDP price deflators. Now a huge debate is going on regarding the recent GDP figure of 7.8% in April -June 2026 quarter. When nominal GDP indicating size of economy has shrunk after revision of base year from 2011-12 to 2022-23, real GDP has increased by massive margin. The main reason is that a low price deflator is used. Nominal GDP – price changes measured by price deflator= real GDP.
This is the truth. What others are saying needs scrutiny in my assessment.
Dr Santosh Kumar Mohapatra Cuttack
source: Odisha post
