Data Vindication

For years, India’s economic ascent has been narrated in two voices. One hailing it as the world’s fastest-growing major economy. The other, more sceptical, mutters about unreliable numbers, weak statistics and growth built on shaky accounting. The latest GDP estimates have given that second chorus far less to sing about.

According to the latest figures, real GDP grew by 8.2 percent in the second quarter of FY 2025–26 (July–September), and by 8 percent in the first half of the year. That makes India, once again, the fastest-growing major economy on the planet. The momentum is not confined to a single sector or a single quarter. High-frequency indicators like GST collections, power consumption, electronic payments and bank credit point to a broad-based expansion driven as much by household demand as by public investment.

Finance Minister Nirmala Sitharaman has attributed the performance to three familiar planks of the Modi government’s economic architecture: fiscal consolidation, targeted public investment and structural reforms to lift productivity and ease of doing business. Roads, ports and digital infrastructure are being built at scale. Balance sheets of banks and of the state are cleaner than they were a decade ago. Private investment, long hesitant after the twin-balance-sheet crisis, is stirring again.

Even as these numbers have impressed markets, a peculiarly technical scepticism lingers abroad. The IMF, in a recent review, rated India’s national accounts system at a ‘C’ - its second-lowest grade - even while awarding the broader statistical system a ‘B.’ The implication, easily misread by critics, is that India’s headline growth figures are barely fit for serious analysis. That reading sits awkwardly with the fact that the same institutions, investors and ratings agencies routinely rely on these very numbers to make multi-billion-dollar decisions.

What these entities fail to grasp is that the popular image of India as a statistical black box is out of date. The informal economy today is less a shadow realm than a partially formalised ecosystem threaded through banking, taxation and digital payments.

Unreported income is not the same as unmeasured activity. Money that evades direct taxation often reappears in spending, deposits, school fees, loan repayments and asset purchases, all of which leave institutional trails.

A sustained 8 percent growth rate reshapes India’s geopolitical weight, deepens its appeal as a manufacturing alternative to China and strengthens its bargaining power in trade negotiations. At home, it raises expectations on jobs and social mobility.

For Western observers accustomed to equating transparency with slow growth and rapid growth with opacity, India’s combination of scale, speed and institutional depth sits uneasily with older development stereotypes. For India’s own anti-Modi detractors, persistent scepticism about GDP has served as a surrogate attack on the credibility of the state itself. The new numbers ought to silence them both. They suggest that growth is not an illusion conjured by creative accounting but a product of physical investment, expanding credit and rising consumption.