How accurately does India’s GDP capture what is happening in the economy? It is a question serious economists have been wrestling with for some years. The February 27 revision to the national accounts methodology — developed through what even the authors of a recent paper on the issue describe as “commendable consultations” — is the most substantive effort to improve GDP estimation, addressing deflator choices, the treatment of the informal sector, and the use of administrative data. Into this conversation steps a working paper by Abhishek Anand, Josh Felman, and Arvind Subramanian, published by the Peterson Institute in March 2026, claiming to provide “new evidence” of systematic misestimation.

The paper’s two core methodological complaints — that India used WPI-based deflators tracking commodity and oil prices rather than prices of actual production, and that it used formal-sector corporate data as a proxy for informal-sector activity — are not new. They have been in the academic literature since at least 2016, including in Subramanian’s own earlier work. These choices were driven by structural data limitations rather than analytical oversight. In the absence of regular annual data on informal-sector output and a comprehensive Producer Price Index, the use of WPI-based deflators and formal-sector corporate data was pragmatic and arguably the most viable option available.

The paper’s assertion that the WPI is an inappropriate deflator and the CPI a better alternative is also misplaced. India’s WPI is conceptually close to a Producer Price Index, which is what international recommendations prescribe. The CPI reflects price movements relevant to private consumption; goods and services such as steel, cement, minerals, chemicals, IT services, trade, and professional services are produced primarily for industrial use and rarely appear in the CPI basket. Real estimates for many services also derive from a much broader set of........

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