Why IMF warns of flaws in India's GDP measurement even as growth hits 8.2% in September quarter

India’s economy expanded a strong 8.2 percent in the September quarter, but the International Monetary Fund (IMF) has raised a red flag on how the country measures its GDP. In its latest Article IV report, the IMF has kept India’s national accounts data—essentially the quality of GDP statistics—at a ‘C’ grade, saying the numbers are based on an outdated structure of the economy.

The rating comes at a time when the Ministry of Statistics and Programme Implementation (MoSPI) is preparing a major overhaul of national data systems, including updating the base year for GDP and inflation.

Why did India get a ‘C’ for GDP data?

The IMF grades countries on the quality of their economic data from A to D. While India received an overall ‘B’, its weakest area was national accounts (GDP data), which scored a ‘C’ due to several issues:

Key concerns raised by the IMF:

• Outdated base year (2011-12): The current GDP calculations no longer reflect today’s digital-heavy, services-driven economy.

• No Producer Price Index (PPI): Without PPIs, India relies on older methods to adjust price changes, which can distort estimates.

• Weak coverage of the informal sector: A large part of India’s economy is still outside formal surveys.

• Insufficient detail in investment data: Components like Gross Fixed Capital Formation (GFCF) need more granular information.

• Inconsistencies across datasets: Differences appear between production-based GDP and expenditure-based GDP.

How does India fare in other areas?

The IMF graded India ‘B’ for all other categories, including:

• Price statistics

• Government finance data

• External sector data

• Monetary and financial data

• Inter-sectoral consistency

A ‘B’ means the data is “broadly adequate” for global surveillance, but needs improvement to move to an ‘A’.

What needs fixing?

The IMF listed several areas where India needs upgrades:

• CPI is also based on 2011-12, and its consumption basket does not reflect modern spending habits.

• Combined central and state government fiscal data hasn’t been published since FY16.

• Mismatches persist between trade data, the balance of payments, and related sets.

• Differences remain between expenditure and production GDP.

MoSPI’s ongoing revision—expected to introduce new base years, better data capture technology, and updated price indices—could help India secure a higher rating when the IMF publishes its next report in late-2026.

How do other countries score?

IMF grades for comparable economies:

• United States – A

• United Kingdom – A

• Japan – A

• Brazil – A

• Indonesia – B

• China – C

India and China are the only major economies at the ‘C’ level, a grade that the IMF says affects global confidence in economic data.