There has been a lot of noise lately about the reliability of India’s national accounting data. Questions are being raised about the base year, the deflators, the informal-sector estimates, etc. This is not a new fight, either: the 2015 base-year revision and the “back-series” controversy that followed it are still cited by both sides whenever the subject comes up.
I do not think this debate is baseless. When a country changes its base year and its estimation method at the same time, the honest question — is the new series really comparable to the old one — is a fair one to ask, and India has not fully answered it.
In my view, a measurement method, even an imperfect one, will give you a broadly correct sense of direction if its bias stays consistent over time. A ruler that is slightly off, used the same way every single time, still tells you whether something is growing or shrinking. The real damage is done when the ruler itself keeps changing — different base years, revised methodologies, quietly redrawn definitions.
Which is exactly why I do not want to rest everything on one number, however it is calculated. I would rather ask a broader question: is India’s growth actually good growth? Not whether it is 6% or 7% in a given quarter, but whether it is the kind of growth that leaves the country stronger, fairer, and more resilient a decade from now. I call this my “sustainability” test.
What I mean by “sustainable” growth
In my view, economic growth earns the label “sustainable” if it, among other things:
· Improves the quality of human life — general living conditions, health outcomes, self-esteem, crime rates, education standards, and accessibility.
· Promotes equality, especially of opportunity and access.
· Preserves and improves the climate rather than mortgaging it.
· Is fiscally prudent, as reflected in the fiscal deficit, the primary deficit, and the tax-to-GDP ratio.
· Uses capital efficiently, as measured by the incremental capital output ratio (ICOR).
· Generates employment elasticity broadly in step with the growth of the workforce — a criterion I apply specifically because India remains a labour-surplus economy; the same low elasticity in a labour-scarce, ageing economy would mean something altogether different.
· Rests on strong public institutions — particularly the judiciary and law enforcement.
· Is financed sustainably from outside — a current account and external-debt position that does not depend on ever-larger foreign borrowing or a steady drawdown of reserves to keep the growth engine running.
These are not the variables that dominate a GDP print, and that is precisely the point. A country can post a healthy growth number while quietly running down its institutions, its climate, its external buffers, or its social fabric. None of that shows up in a quarterly release. It shows up ten or twenty years later, usually at the worst possible time.
To be clear, this is not an exercise in preferring “qualitative” judgement over “quantitative” data — that would be a false choice, since education standards, crime rates, capital efficiency and fiscal deficits are all measured with numbers too, and each of those numbers has its own well-known quality problems. What I am really doing is trading one politically salient statistic for a basket of harder-to-manipulate ones. It is much easier to manage the optics of a single GDP print than it is to simultaneously flatter eight independent indicators that rarely move together.
Why I judge India against its own past, not against other countries
I deliberately do not run this test on a relative basis — India versus China, India versus Vietnam, India versus the OECD average. Every country carries its own socio-economic baggage: its history, its demography, its institutional starting point. Judging India by a Scandinavian yardstick, or by a Southeast Asian one, tells you more about the yardstick than about India.
To be explicit about what I am doing instead: my benchmark is India’s own trajectory over time — is each of these factors improving, stagnant, or worsening relative to where India itself stood ten and twenty years ago. That is a narrower, more honest comparison than a snapshot verdict, and it is also harder to fudge, because it forces me to actually show the trend rather than assert a label. That is the exercise I intend to carry out, factor by factor, in my subsequent posts.
India’s actual record on the sustainability test
Prima facie, measured this way, India’s growth story is mixed. There is no category where I can honestly say we have an excellent track record.
On basic education standards, on climate, on equality of opportunity, and on crime, the record has been weak — not because there has been no effort, but because the gap between intent and outcome remains wide. On health, capital efficiency, employment elasticity, and fiscal prudence, the picture is closer to average: neither a source of pride nor a cause for alarm, but a reminder that there is real work still to be done.
This is not a pessimistic conclusion. It is simply an honest one. Growth that is directionally positive but structurally uneven is still growth — but it is fragile growth, and fragile growth deserves a more careful reading than a single headline GDP figure, however it is computed, can offer.