Working paper by Anand, Felman, Subramanian finds post-2011 growth overstated by up to 2% annually
By TRH News Desk
New Delhi, March 17, 2026 —A new working paper by leading economists has reignited debate over the accuracy of India’s economic growth data, suggesting that official GDP figures may have significantly overstated growth over the past decade.
Titled “India’s 20 Years of GDP Misestimation: New Evidence”, the study by Abhishek Anand, Josh Felman and Arvind Subramanian argues that India’s growth trajectory has been misread due to methodological issues in national accounts.
The authors find that while growth during the boom years of 2005–2011 may have been underestimated by about 1–1.5 percentage points, the trend reversed thereafter. “Subsequent growth between 2012 and 2023 may have been overestimated by about 1.5–2 percentage points,” the paper states.
This recalibration fundamentally alters the narrative of India’s economic rise. Instead of steady high growth, the study suggests a sharp boom in the mid-2000s followed by a prolonged slowdown after the global financial crisis and domestic shocks.
“The Indian economy did not grow at a stable rate… but rather boomed during the early 2000s, then decelerated,” the authors note.
A key reason identified is the over-reliance on formal sector data to estimate output in the vast informal economy. The study argues that shocks such as demonetisation, the rollout of GST, and the COVID-19 pandemic hit the informal sector disproportionately—yet official data failed to capture this divergence.
Another major factor was flawed price deflators. Falling global commodity prices, especially oil, artificially boosted real growth estimates, leading to inflated GDP figures.
The paper also highlights that India became an “outlier” globally, with growth numbers diverging from key macro indicators such as exports, credit, electricity consumption and corporate sales after the 2015 methodology change.
According to the estimates, correcting these distortions reduces average growth in the past decade by nearly 1.5–1.9 percentage points, recasting the period as one of moderate—not rapid—expansion.
The implications are significant. Overestimation could mean India’s economy is smaller than believed, with real GDP potentially overstated by around 22 percent.
The authors caution that accurate data is critical for policymaking. Misleading growth figures risk poor decisions by governments, businesses and central banks.
The study comes as India has recently revised its GDP methodology, with the authors noting that these changes aim to address long-standing concerns around data quality and measurement.
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