Chief economic adviser V. Anantha Nageswaran said on Friday the 5.4 per cent second quarter GDP growth estimate could be revised upwards as the current estimates are not seasonally adjusted.

Besides, economic activity in some sectors have picked up pace during October-November and a GDP growth of 6.5-7 per cent in the current fiscal is feasible, the CEA said. He was speaking at an Assocham event here.

“I think in reacting to these numbers, I don’t think we should throw the baby out with the bathwater. Because the underlying growth story still remains very much intact,” Nageswaran said.

Nageswaran’s statement comes a day ahead of the Reserve Bank of India’s decision on interest rates on Friday. Senior central ministers Piyush Goyal and Nirmala Sitharaman have been demanding the RBI cut rates to crank up growth even as Reserve Bank governor Shaktikanta Das is firm on inflation coming down on a durable basis before considering a rate reduction.

The comments will avoid any embarrassment within the government should the RBI decide to hold rates as it is very likely to do.

Nageswaran’s claim of a possible upward revision in Q2 GDP growth rate may be explained by the head “discrepancies” in the national income accounts.

Sujan Hajra, chief economist and executive director, Anand Rathi Shares and Stock Brokers, said “The GDP is estimated using two approaches — Gross Value Added (GVA) and GDP. GVA method calculates activities from the supply side through contributions from agriculture, industry, and services. GDP method measures it from demand side through consumption, investment, and net exports”.

“In theory, the difference between the value of GDP and GVA equals to indirect taxes net of subsidies. Beyond this, any additional difference between these methods is categorised as discrepancies, which reflects the non-availability of complete data at the point of publishing but can significantly impact reported growth figures.”

“For Q2 FY25, discrepancies stood at negative ₹68,825 crore, versus positive ₹18,943 crore in Q2 FY24 — the net change is equivalent to 2 per cent of Q2 FY25 GDP.”

“This suggests that when more accurate data for Q2 FY25 is received in the coming months, in revised data the growth rate for Q2 FY25 is likely to be revised upwards from 5.4 per cent,” he added.

Nageswaran said the slowdown in GDP growth in the second quarter could be because of some “religious observances” in September and excess monsoon rainfall, could be also because of other more long-standing issues that are beginning to emerge.

So explanations could be from mundane to more serious ones, he said, adding this is the first estimate for second quarter GDP growth. “It could be revised higher,” Nageswaran said.