India grew 7.8%. The argument is now about how that growth is measured

India's economy grew 7.8% in the April-June quarter, beating the 7.1% forecast in a Reuters poll. On its face, that is a powerful number: investment was strong, manufacturing expanded and services continued to carry a large share of the economy. But within days, the discussion moved away from whether growth was high and toward a more technical question - how exactly was that 7.8% calculated?

The controversy matters because India changed the way it measures GDP earlier this year. The new series updated the base year, changed some data sources and introduced a more granular system for stripping inflation out of nominal economic activity. That last step is important. Real GDP is not simply the value of everything produced. Statisticians first estimate nominal output and then use price measures, known as deflators, to separate genuine growth in production from increases caused by inflation.

Several economists have focused on the unusually low deflator used in the latest quarter. Reuters reported that the GDP deflator was about 2.3%, lower than other widely followed inflation measures. A lower deflator can produce a higher estimate of real growth if nominal output is unchanged. That does not by itself prove the number is wrong, because GDP covers a different basket of activity from consumer or wholesale price indices. But it explains why the methodology is now under scrutiny.

Former finance secretary Subhash Chandra Garg questioned the comparison with the year-earlier period after the new series revised the nominal size of that base. Former RBI governor Raghuram Rajan made a different point: if India has been growing so strongly for years, why has the expansion not translated more visibly into private investment, foreign capital inflows and enough high-quality jobs? Rajan later clarified that he was raising a broader question about the transmission of growth, not alleging that a particular quarterly estimate was fabricated.

The government has defended the new series. Statistics officials say the changes followed wide consultation and are intended to reflect the modern economy more accurately. They also point to indicators that are consistent with strong activity, including vehicle sales, bank credit, tax collections and investment. That evidence is important because GDP should not be read in isolation.

The bigger issue is the gap between a national accounts number and lived economic experience. GDP can rise rapidly even when gains are unevenly distributed. It can coexist with weak wage growth in parts of the economy, difficult job markets for young workers or subdued investment in certain private sectors. None of those automatically invalidate GDP. They answer different questions.

For India, this debate is therefore bigger than one quarter. As the country becomes a larger part of the global economy, confidence in its statistical system matters to investors, policymakers and citizens. A 7.8% growth rate is important. Understanding what sits underneath the number is even more important.