Ministry of Statistics and Programme Implementation (MoSPI) Clarifies Negative Manufacturing Deflator in GDP Methodology

Key facts

• The Ministry of Statistics and Programme Implementation (MoSPI) clarified that a negative implicit deflator for manufacturing does not indicate a decline in factory-gate prices.
• In Q1 of 2026-27, manufacturing nominal GVA grew 7.7% against 9.2% real GVA, yielding a -1.5% implicit deflator.
• The negative deflator arises from double deflation when input prices rise faster than output prices, notably in textiles, basic metals, and rubber and plastic products.
• MoSPI revised Q1 2025-26 GDP to ₹80.32 lakh crore under the new 2022-23 base series, later updated to ₹80.44 lakh crore and then to ₹80 lakh crore after incorporating new IIP and PPI data.
• Q1 2026-27 GDP stood at ₹88.27 lakh crore, with an implied GDP inflation rate of 2.5% against CPI inflation of 3.9% and WPI inflation above 9%.
• In mining, real GVA contracted 2.4% while nominal GVA grew 22.3% in Q1, as crude petroleum and natural gas prices rose sharply on the PPI measure.
• MoSPI stated that the statistical discrepancy between production-side and expenditure-side GDP estimates is a balancing item and not evidence of under- or over-statement.