A critical story that a chunk of the media missed

The release of the national accounts data for Quarter 2 recently was also one that coincided with serious concerns being expressed by the International Monetary Fund (IMF) about the way India calculates its data. In fact, the IMF has given India’s national accounts statistics, which includes Gross Domestic Product and Gross Value Added, a C grade, which is the second lowest grade. While Q2 produced 8.2% growth — much more than expected — very few would be aware of the IMF’s concerns.

This is because the media virtually ignored what the IMF had to say. Only one daily, The Hindu, reported it and made it a front page story (IMF gives ‘C’ grade for India’s national accounts statistics, November 28, 2025), but the pink papers, which should have been the most interested in this report, ignored it to a large extent. When some of these newspapers decided that it was worth publishing, they did so, but only in the inside pages, which was bizarre and perplexing.

An issue

The truth is that the IMF’s grading of India’s national accounts statistics is a matter of concern and a key part of that is how we calculate GDP.

Editorial | Data deficiencies: On India and the IMF’s low grading

India uses the formal organised sector as a proxy for calculating growth in the informal unorganised sector. But the unorganised sector, even after excluding agriculture, is still 30% of GDP. So the first question is this: do we really have a reliable and accurate way of estimating growth in this sizeable sector or is it just an intelligent guesstimate?

‘A less than reliable method’

Pronab Sen, the former Chief Statistician, and Arun Kumar, a former professor of economics at Jawaharlal Nehru University — the economists this writer spoke to — believe that this is “a less than reliable method”.

Their concern needs explanation. When you use the organised sector as a proxy for calculating the unorganised sector, the assumption made is that they have both moved in the same direction. But when there is a crisis or an unusual development, that may not be the case. And that is exactly what happened when India went through demonetisation, the introduction of Goods and Services Tax (GST) and the COVID-19 pandemic. These events have meant that India’s organised and unorganised sectors have not been in kilter. They have moved in different directions.

While the organised sector expanded on all three occasions, the unorganised sector went into decline. So, during these years, using the organised sector as a proxy for calculating the unorganised sector meant that we were overestimating the performance of the unorganised sector.

What does this mean about India’s quarterly estimates? It must be remembered that what made the media euphoric was the quarterly estimate of 8.2% growth. Professor Sen’s statement must be brought in at this point: “For the quarterly GDP estimates we make a lot of assumptions. We simply don’t have quarterly data for most things. Now[,] when we don’t have the data you have to go by assumptions. You look at past relationships, past trends and try to do the best you can. But until we get to a situation where most of the data that we need for quarterly estimations are actually corrected physically[,] this problem is not going to get solved.”

The answer is blunt

This leads to another conclusion. The concern that the IMF has expressed, and which underlies the lowly ‘C’ grade, is not going to be hastily resolved. There is no doubt that the Union Ministry of Statistics and Programme Implementation is working on updating the GDP base year and methodology of calculation and hopes to release the new series next year, probably by the end of February. But the question is this: how much improvement will we see in the way the unorganised sector is estimated? When asked if India can adequately resolve the IMF’s concern, Prof. Sen’s answer was short and blunt: “I don’t think we can.”

All this has been mentioned because we rely on the media to inform us and, usually, to help us analyse and understand. But if the media ignores critical stories, it leaves us not just uninformed but also unable to fully understand what has happened. It also means that journalists are not doing their job. That is a sorry outcome for all of us.

Karan Thapar is a television anchor