IMF Retains ‘C-grade’ for India’s National Account Statistics: Why the New GDP Series Is Important?

Context

1. The International Monetary Fund (IMF), in its 2025 Article IV report, has retained a ‘C-grade’ for India’s national account statistics (GDP data), indicating data shortcomings that somewhat hamper surveillance.
2. This comes at a time when India’s GDP growth for July-September 2025 surged to 8.2%, raising questions on the credibility and transparency of official GDP estimates.

What is IMF Data Adequacy Assessment?

1. Under Article IV consultations, the IMF annually evaluates macroeconomic data of member countries.
2. Its purpose is to check whether a country’s statistics are reliable enough for global policy assessment and surveillance.
3. Grades range from A to D:
   1. A: Data adequate and reliable
   2. B: Some shortcomings but broadly adequate
   3. C: Shortcomings that somewhat hamper surveillance
   4. D: Serious shortcomings that significantly hamper evaluation
4. India received:
   1. B overall rating (for prices, government finance, external sector, monetary & financial data)
   2. C for National Accounts (GDP)

Why did the IMF Graded India ‘C’ for National Accounts?

The IMF has retained a C-grade for India’s GDP statistics because it believes certain weaknesses reduce reliability and make economic assessment difficult. These concerns include:

1. Outdated Base Year (2011-12): India still calculates GDP using old consumption and production patterns that do not fully reflect today’s digital economy, gig workforce, services growth, and modern industry structure. This means GDP may not accurately represent the current economy.
2. Limited Data Revisions and Weak Granularity: Major countries frequently revise GDP data using updated information. In India, revisions take longer and lack detailed breakdowns, making it difficult to analyse sector-wise strengths or weaknesses effectively.
3. Methodological Issues: India uses the Wholesale Price Index (WPI) to convert nominal GDP to real GDP in some sectors, while global standards use the Producer Price Index (PPI). PPI better reflects actual producer-level prices, so IMF argues that using WPI may distort real growth estimates.
4. Delays in the National Census and Government Financial Data: Without an updated Census, data on population, employment, income and poverty may be inaccurate. Similarly, fiscal data for Centre + States is not available on time, making accurate budgeting and debt assessment difficult.

Hence, the IMF believes these shortcomings reduce accuracy and transparency, affecting investor confidence and policy planning.

What IMF Suggested?

To improve credibility and align with global standards, the IMF recommended:

1. Regular revisions of GDP, inflation and other macroeconomic data using modern methods
2. Completing the Population Census quickly, as it is essential for reliable estimates of consumption, labour force and poverty
3. Timely and consolidated reporting of government accounts from both Centre and States to ensure transparency in public finance
4. Adopting global best practices such as modern price indices (PPI), updated surveys and big data sources (GST, digital payments, corporate filings, satellite data)

The IMF wants faster, more transparent and internationally comparable statistical systems so that macroeconomic decisions are based on accurate numbers.

Government Response

The Ministry of Statistics and Programme Implementation (MoSPI) says:

1. Work is ongoing to improve data systems
2. New GDP series with 2022-23 as base year and new CPI inflation series will be launched in February 2026
3. Expected improvements:
   1. Revised methodology
   2. New data sources such as digital economy, GST data, formal sector payroll, rural-urban surveys
   3. Better sectoral coverage

The government believes better ratings should be given once the new system is implemented.

Why the New GDP Series Matters

1. Updates economy measurement to reflect structural changes (digital economy, services expansion, gig economy)
2. Improves accuracy, credibility, and global confidence
3. Reduces policy misinterpretation & sudden controversies
4. Helps better monetary, fiscal and investment decisions

Implications

Challenges and Way Forward

Conclusion

India’s fast-growing economy needs robust and transparent statistical systems. The IMF’s C-grade is not a verdict on performance, but a signal to upgrade data quality, frequency and methodology. With the new GDP and CPI series coming in February 2026, India has an opportunity to strengthen credibility, improve policy effectiveness, and align with international standards.