IMF gives India a ‘C’ on its GDP and other national accounts data, the second-lowest grade

The International Monetary Fund’s (IMF) annual review has given India’s national accounts statistics, which includes key figures such as Gross Domestic Product (GDP) and Gross Value Added (GVA), a grade of ‘C’, the second-lowest grade there is.

According to the IMF, this grade means the data available “have some shortcomings that somewhat hamper surveillance”. This is of particular significance as the government will release the national accounts data for Q2 of this financial year on Friday (November 28, 2028).

“National accounts data are available at adequate frequency and timeliness and provide broadly adequate granularity,” the IMF noted in its annual Article IV assessment of India’s economic framework. “However, some methodological weaknesses somewhat hamper surveillance and warrant an overall sectoral rating for the national accounts of C.”

Overall, across all data categories, India has received a grade of ‘B’. There are four grades in total: A, B, C and D.

‘Sizeable discrepancies’

For example, it highlighted an outdated base year of 2011-12 on which the data is based, and the use of wholesale price indices as data sources for deflators due to a lack of producer prices indices.

It further pointed out periodic “sizeable discrepancies” between the production and expenditure approaches of measuring GDP, “that may indicate the need to enhance the coverage of the expenditure approach data and the informal sector”.

The Indian government has, from the beginning, used the income approach to measure GDP by measuring the incomes of the government, people, and companies. However, it also provides an estimate based on the expenditure approach, which attempts to quantify GDP through the spending done by these entities.

Often, due to the differing data sources and their coverage, the two estimates of GDP differ, which has attracted criticism from some economists.

Finally, the IMF also highlighted the lack of seasonally adjusted data and “room for improvement of other statistical techniques” used in the quarterly national accounts data.

“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,” the IMF said.

Inflation data also has issues

Regarding India’s main inflation measure, the Consumer Price Index, the IMF graded India a ‘B’, which means the data provided “have some shortcomings but are broadly adequate for surveillance”.

It said that while the CPI data scores well on its frequency and timeliness, coming as it does once a month and with only a month’s lag, the rating of ‘B’ reflects the outdated CPI base year, items basket, and weights (set in 2011-12), “implying that the CPI basket likely fails to accurately represent current spending habits”.

It is important to note that the Ministry of Statistics and Programme Implementation is currently working on updating the GDP and CPI base years and methodology to make them more up to date. The new series of both datasets are expected to be released in early or mid 2026.

The other facets of government data — government finance statistics, external sector statistics, monetary and financial statistics, and inter-sectoral consistency — were all scored ‘B’, with the IMF pointing out strengths and weaknesses in each of them.

Notably, India’s national accounts statistics received a ‘C’ grade in last year’s review as well, with the IMF noting this year that “data weaknesses have remained broadly unchanged” since the last report, but acknowledged that plans to upgrade real sector statistics “are advancing”.