Washington/New Delhi, The International Monetary Fund has assigned India a ‘C’ rating for the quality and adequacy of its national accounts and macroeconomic data, casting a rare public spotlight on long-standing methodological concerns even as official figures paint a picture of vigorous economic expansion.
In its latest Data Quality Assessment Framework (DQAF) update released on 26 November, the IMF concluded that “serious shortcomings” in India’s statistical base continue to hamper effective economic surveillance. The rating places India in the third of four tiers, implying that data deficiencies “materially affect” the Fund’s ability to monitor the economy.
The verdict comes at an awkward moment for New Delhi. Last week, the Ministry of Statistics and Programme Implementation reported that real GDP grew 8.2 per cent year-on-year in the July–September quarter of FY2025-26, sharply up from 5.6 per cent in the same period a year earlier. The government has projected nominal GDP to reach $7.3 trillion in the current fiscal year, cementing India’s position as the world’s fastest-growing major economy.
Yet the IMF’s assessment highlights persistent structural weaknesses:
– The national accounts continue to rely on the 2011-12 base year, now widely regarded as outdated.
– India still uses the Wholesale Price Index rather than a producer price index, distorting deflation and real growth calculations.
– Coverage of the informal sector — which accounts for roughly 90 per cent of employment and nearly half of value added — remains indirect and largely extrapolated from organised-sector indicators.
– Data on non-bank financial companies (NBFCs), household balance sheets and system-wide financial interconnectedness are described as “limited”.
On frequency and timeliness, however, India received the top ‘A’ grade, reflecting improvements in dissemination practices.
Political Storm
The report has triggered an unusually sharp domestic political row.
Senior Congress leader and former finance minister P. Chidambaram described the downgrade as evidence that “the GDP numbers do not reflect ground reality”. Party colleagues Jairam Ramesh and Supriya Shrinate argued that private investment remains stagnant and that informal-sector distress — exacerbated by demonetisation, GST implementation glitches, the NBFC crisis and the Covid shock — is being masked by over-reliance on listed-company performance.
The ruling Bharatiya Janata Party (BJP) dismissed the criticism as politically motivated. Amit Malviya, head of the party’s IT cell, noted that the ‘C’ rating has remained unchanged for several years and stems primarily from the obsolete base year rather than deliberate manipulation. He pointed out that the government has already announced a shift to a 2022-23 base series in February 2026, a move the opposition had previously criticised as statistical sleight-of-hand when the 2011-12 series was introduced.
Economists’ Long-standing Concerns
Independent economists have echoed many of the IMF’s reservations for years.
Arun Kumar, former professor of economics at Jawaharlal Nehru University, told a television programme that the informal sector has suffered successive blows yet its contribution is mechanically assumed to grow in line with the formal economy. “When 300,000 companies were struck off as shell entities after demonetisation, the GDP numbers barely blinked,” he noted.
M.K. Venu, co-founder of The Wire and a veteran economic commentator, described the downgrade from an earlier ‘B’ rating as “damaging to India’s global credibility at a time when the government is aggressively marketing the ‘India growth story’.”
The controversy underscores a broader tension: while corporate India and formal-sector indicators show resilience, high-frequency data on consumption, two-wheeler sales, rural wages and informal employment continue to signal weakness. The IMF’s blunt assessment suggests that reconciling these divergent narratives will require more than a base-year revision.
For now, the world’s fifth-largest economy finds itself celebrating headline growth numbers while defending the statistical foundations on which they rest.
