Where ignorance is bliss

It is not that the government is unaware of deficiencies in the national GDP data accounting process; in fact, as the Finance Minister has already stated in Parliament, India will adopt 2022-23 as the new base year for national accounts with effect from February next year as a part of updating our economic data framework. The revision will prepare India for a higher rating in time for the IMF's staff report for 2026 by updating the base year for both CPI and GDP to improve the granularity of the data

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As India's GDP clocked 8.2 per cent in Q2, IMF gave a 'C' grading to our national account statistics.

It also labelled the RBI's exchange rate regime a "crawl like arrangement". Both these have given fresh ammunition to the opposition to discredit the government, and social media is full of sarcastic comments about the quality of our data systems. A prominent opposition leader even described the timing of release of GDP data as "ironic", given the IMF's grading. This is a complete misunderstanding of the whole issue.

The IMF Articles of Agreement define the rules of supervision of the global monetary system by the IMF upon its creation in 1944, including its powers, rights and obligations, etc. Under Article 4 of this Agreement, IMF is mandated to conduct regular surveillance of each member's macroeconomic performance. In its 2025 report on India, it held that India's national account statistics, currently computed on the base year 2011-12, makes the GDP estimates unrepresentative of the reality, while retaining the grade 'C' for GDP data it gave in 2024.

In the overall Data Adequacy Assessment, the Median Rating for India was 'B', same as in 2024. So, nothing has really changed and our data quality has not particularly worsened this year. The Data Adequacy Assessment is based on a few parameters including statistics on price, public finance, external sector, monetary and fiscal statistics and intersectoral consistency, and median rating is given based on all these parameters. 'B' grade is given when IMF feels that the data provided are broadly adequate for surveillance, though with some shortcomings, while 'C' grade signifies that the shortcomings in the data "somewhat hampers surveillance".

Except National Accounts statistics, India has scored 'B' grading in respect of all other parameters. Among the emerging economies, China's gradings are the same as India's, while Brazil has received A grading for 2025.