India’s ‘real feel GDP’ growing only at 2-3%; Shankar Sharma joins the debate

The sharp contrast between India’s headline GDP growth and how the economy feels on the ground has become the focus of stock market veteran Shankar Sharma’s take on the latest set of data.

Writing on X after India reported 7.8% GDP growth in the first quarter of FY27, Sharma said he was no longer interested in getting drawn into the GDP growth debate. Instead, he prefers to look at what he calls “Real Feel” GDP growth.

Despite being a $4 trillion economy growing at around 7%, he said, the quality of life appears to be deteriorating, with people looking stressed and traffic looking chaotic. He added that cities and villages appear more like those of a $100 billion economy than a $4 trillion one. Based on this measure, Sharma put India’s “Real Feel” GDP growth at just 2-3%.


Also read: 'Jobless people': Piyush Goyal slams opposition, Subhash Garg's criticism of Q1 GDP growth

He contrasted this with Europe, where headline GDP growth is around 2-3%. Sharma said the picture on the ground appears very different, with people looking happy and a sense of “Khushhali” or prosperity visible around them. He pointed to organised and clean surroundings, buzzing cafes and restaurants, music on the streets and attractive villages as signs of a stronger lived experience.

For Europe, Sharma’s “Real Feel” GDP growth therefore comes to 7.8%, sharply above the reported growth rate.

India GDP growth rate

His comments came after Commerce and Industry Minister Piyush Goyal hit back at opposition leaders and former finance secretary Subhash Garg over criticism of India's 7.8% GDP growth in the first quarter of fiscal 2026-27, saying critics were comparing data from different GDP series and attempting to misguide the public.

"The naysayers can say what they want, but 7.8 per cent growth is a reality. When I see on television some of the opposition leaders, even possibly you can throw in along with them a former finance secretary or a former Reserve Bank governor, both of whom could not complete their time in India or in the government and for the right reasons.

Read more: PR can polish picture of GDP, but not economy itself: Congress slams Modi government

India’s GDP grew 7.8% in Q1 FY27, accelerating from a revised 6.9% in the same quarter last year. Growth was supported by consumption, exports and government capex, despite supply chain disruptions and higher commodity prices triggered by the US-Iran war.

The April-June quarter growth, however, was slower than the revised 8.6% expansion recorded in the previous three months. Gross value added grew 8.2% in real terms, compared with 7.1% in the corresponding quarter of the previous fiscal, while nominal GVA growth stood at 11.5% in Q1 in real terms.

The 7.8% GDP growth was also ahead of expectations, with an Economic Times poll forecasting 7.3% growth for the quarter, while the Reserve Bank of India had projected 7%. Prime Minister Narendra Modi described the Q1 FY27 performance as a “herculean feat”, saying the economy had remained resilient despite oil price shocks, supply chain disruptions and global uncertainties.

Input cost pressures due to the West ‌Asia conflict were offset by higher volume growth with sectors like manufacturing and electricity, gas growing by close to 9%. The stand-out sector remained services, with financial, real estate, and professional services growing by a high of 12% in the quarter, she said.

"Going forward, we revise our GDP growth estimate for the full year to 7% from 6.8% taking into account the strong Q1 print and with monsoon performance broadly holding up during the Kharif season, limiting the risk ‌for rural demand,” Sakshi Gupta, Principal Economist at HDFC Bank, said.

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