Societe Generale’s Kunal Kundu asserts that India’s newly launched GDP series significantly challenges the country’s previous growth narrative, indicating that historical real GDP growth and domestic consumption were substantially overstated. According to the revised data, real GDP growth was over‑stated by approximately 2 percentage points, which is described as an 'unheard‑of magnitude for a national account’s revision' [1]. The new series points to a lower activity level and more modest earlier growth, aligning more closely with high-frequency indicators and labour market surveys [1].
The analysis highlights several structural constraints facing the Indian economy, including household balance-sheet stress and persistently weak domestic demand. Notably, the new series revealed an unprecedented trend of negative manufacturing sector deflator during periods of high inflation, further underscoring weak demand conditions [1]. The data now shows that the previous GDP series consistently overestimated domestic demand [1].
Kundu also notes that the cyclical recovery from the pandemic low has encountered a barrier imposed by structural limits to growth, suggesting that the economy’s rebound has not been as robust as previously believed [1]. Furthermore, the anticipated September 2025 GST rate cut is expected to provide limited benefits for overall demand, given the underlying structural issues [1].
CONCLUSION
India's revised GDP series signals a significant downward adjustment to historical growth and domestic demand, challenging previous economic narratives. The findings suggest structural constraints and household stress are limiting recovery, with future policy measures like the GST rate cut unlikely to substantially boost demand. This revision is likely to have a high market impact, prompting reassessment of India's economic outlook.