‘Egregiously wrong’: World Bank’s Neelkanth Mishra rejects 2.6% GDP growth claim

World Bank Executive Director Neelkanth Mishra has rejected claims that India’s economy would have grown by only 2.6% in the June quarter of the current fiscal if the original GDP base had been retained, calling the argument “ill-educated” and “egregiously wrong”.

Mishra’s remarks on X came amid a political and economic debate over India’s latest growth figures, which were questioned by former finance secretary Subhash Chandra Garg.

India’s economy grew 7.8% in the first quarter of the current fiscal, according to the revised GDP series released by the government. Garg had argued that the previous year’s current-price GDP, which stood at around ₹86 lakh crore, was subsequently revised to ₹80 lakh crore. He said that had the earlier base been retained, the headline growth rate would have been only 2.6%.

Mishra defends revised GDP series

Rejecting the argument, Mishra said the new GDP series, introduced in February 2026, had “cleaned up” the data and significantly improved the methodology. He said the downward revision to the base had been known since March and that the revised series had increased the credibility of real-output estimates.

“The claim is so obviously wrong that several logical rebuttals have already been made,” Mishra said, adding that misinformation tends to travel faster than accurate information.

Mishra, who until recently served as chief economist at Axis Bank, said economic indicators pointed to strong underlying momentum. He noted that passenger vehicle dispatches, including cars and SUVs, rose 35% year-on-year in August despite exports growing only 9%. Two-wheeler growth exceeded 20% while commercial vehicle dispatches increased by more than 40%.

Stronger credit, tax collections signal momentum

Mishra also pointed to stronger tax collections, accelerating credit growth and robust construction activity as evidence of improving economic momentum.

According to Mishra, credit growth, which had remained weak through the first half of FY26, has now accelerated. He said the earlier weakness was largely a supply-side issue rather than a lack of demand and that the problem had, for now, been addressed.

Mishra said the fading of fiscal headwinds and an improvement in monetary conditions could push consensus estimates for India’s trend growth above 7%. With fiscal and monetary policy remaining neutral, he estimated that the economy could sustain growth of around 7.5%.

He cautioned, however, that some slack remained in the economy, reflected in weak real-wage growth. Several quarters of above-trend growth may be needed before that slack is absorbed and inflationary pressures become persistent again.

Government defends methodology behind new GDP estimates

The government, meanwhile, has defended the methodology behind the revised GDP estimates, saying changes to earlier GDP figures and differences across price measures reflect updated data and estimation techniques, rather than an attempt to inflate growth.

The revised series, released this week with 2022-23 as the new base year, incorporates a new Producer Price Index, a Banking Services Price Index and additional administrative data.