Good news, with concerns.

"Exceeding expectations, and marking a six-quarter high, India's gross domestic product (GDP) quickened to 8.2% in the second quarter of FY26 (July-Sept), up from 5.6% in the same quarter last year." Nominal GDP grew by 8.7%, which means that the GDP deflator is very low at 0.5%. "The expansion is underpinned by strong rural and government expenditure even as private capital spending remained subdued." ET. The GDP deflator is calculated by correcting for inflation according to a base year. wikipedia. "India's base year is 2011. It is recommended that India move towards chaining its base year." World Economics. In 2025, "The International Monetary Fund (IMF) has retained its overall 'B' grade on India's official statistics and the 'C' grade for the national accounts data, reiterating that methodological weaknesses 'somewhat hamper surveillance'." TIE. The Ministry of Statistics and Programme Implementation (MoSPI) has announced that the third quarter (Sept-Dec) GDP will be released using 2011-12 as the base year and again by using 2022-23 as the base year. MC. That will ease analysis of data using both base years. GDP grew 7.8% in the Apr-Jun quarter of 2025-26, while the nominal GDP was 8.8%, giving a deflator of 1%. newsonair.gov.in. The deflator is so low because India's Consumer Price index (CPI) inflation rate has collapsed from 6.2% in October 2024 to 0.3% in October 2025 (rateinflation.com). "Finance Minister Nirmala Sitharaman...said the latest GDP members reflect strong momentum supported by reforms and fiscal consolidation as India's economy grew 8.2%.., reaffirming its position as as the world's fastest-growing major economy." ET. Certainly something to boast about, because stable prices are good for consumers, especially the poor, who can get better returns for their money. But, are there any side effects? "India's fiscal deficit for April to October, or the first seven months of this fiscal year, was at Rs 8.25 trillion, equivalent to 52.6% of annual estimates, widening from the previous year's 46.5%." "Total receipts stood at Rs 18 trillion," including an eye-watering Rs 2.69 trillion dividend from the Reserve Bank of India (RBI), while overall expenditure was Rs 26.25 trillion. ET. "Governments rely on nominal GDP (approximately real growth plus inflation) to estimate revenue. When inflation is low, tax revenues are lower than projected, creating a budget shortfall," wrote Monica Halan. Monica Halan supports the RBI mandate of retail inflation at 4%, within a tolerance band of 2-6% (Reuters). In an effort to increase liquidity and reduce borrowing costs, "The RBI will cut its interest rate by 25 basis points to 5.25% on 5 December, according to a majority of economists polled by Reuters who expect the rate to stay there through 2026." ET. But, "The Indian rupee logged a monthly fall and closed just shy of its record low on Friday (yesterday), largely supported by intervention by the central bank which countered pressure from outflows and a pickup in appetite to wager against the currency." Reuters. So will the RBI lower borrowing costs to stimulate consumption and increase tax collections? Or allow the rupee to weaken against the dollar to increase prices of imports and add to inflation? And, will it be able to dish out another humongous dividend next year? High real GDP a poisoned chalice? Suspense.