The publication of GDP estimates is usually a tame affair. Apart from the relatively small group of economists, statisticians and policymakers who wait for NSO's pronouncement, GDP numbers leave the man on the street cold. Unlike inflation estimates that have a bearing on their well-being, GDP estimates are no more than an esoteric statistic.

But this time was different. Thanks to NITI Aayog CEO B V R Subrahmanyam jumping the gun less than a week before the numbers were published, NSO's humdrum release took on a different hue.

'We are the fourth largest economy [overtaking Japan and behind the US, China, and Germany] as I speak. We are a $4 trillion economy as I speak,' said Subrahmanyam, speaking at a press conference after the 10th NITI Aayog Governing Council meeting. Sure, some of that gloss came off, courtesy Aayog member Arvind Virmani's more guarded response. 'India is in the process of becoming the fourth largest economy, and I am personally confident that will happen by the end of 2025 because we need (data) of all 12 months' GDP to say that. Till then, it remains a forecast.'

But soon after, Narendra Modi joined forces with Subrahmanyam, setting the stage. Interest in NSO's release last week rose.

The hype was not unwarranted. The economy did way better than expected. The reality, however, is that despite a strong 7.4% growth in Q4 FY25 and annual growth of 6.5%, we still have some way to go before we get that 4th-largest economy tag. That is still Japan's at $4.2 tn (IMF 2025). But we are not far behind with a nominal GDP of ₹330.68 lakh cr ($3.89 tn) as of March.

But should we rest content with that? How should we look at the numbers? The answer: with a soupcon of delight, tempered with a touch of realism. Given the enormity of what GDP estimates measure, the frequency and extent of revisions (not unique to India), GDP estimates are a bit like Churchill's description of democracy: the 'least bad alternative' compared to other measures/lack of better alternatives.

For one, estimates are subject to change. As the NSO's term 'provisional GDP estimates' suggests, these are tentative estimates (and will remain so till about two years down the line when we get the 'final' numbers). For another, the economy's performance in the January-March quarter (Q4 FY25) is a poor guide to how growth will pan out in fiscal 2025-26.

And that is perhaps the biggest drawback. One of the USPs of good datasets is that they aid policy formulation. The policy toolkit for a slowing economy, for instance, is different from that for an overheated economy. But thanks to uncertainties on the trade front (read: Trump's on-again-off-again tariffs), there's no knowing whether the economy needs support, and, if yes, of what kind.

The drama on reciprocal tariffs is yet to play out. Witness the ruling against Trump's tariffs by the US Court of International Trade and the reversal of that ruling by the appeals court, and then its stay. India's trade deal with the US is still in the works, while the details of the US-Britain deal and the US-China deal are not fully known. What is clear is that the global economy, India included, will slow. To what extent is not clear.

With that caveat in mind, a closer look at the disaggregated numbers shows that the sectoral imbalance between the agriculture and services sectors continues. So, while the services sector contributed 57% of FY25 GDP, though it employs a little over 30% of the population, agriculture accounted for 16% of GDP, while supporting as much as 46% of the population. With services sector growth (7.3%) continuing to outpace growth in agriculture (5.4%), this imbalance will only increase, with adverse implications for equity, apart from straining the country's social fabric.

Remember, in per-capita terms, we are still near the bottom of the global league tables: 136 in nominal GDP and 119 in PPP terms. Of course, per-capita income is not the best yardstick. Like all averages, it glosses over the distribution aspect. What matters is how those at the bottom of the pyramid fare. For this, the poverty ratio is a better measure.

The good news is that India's poverty ratio has fallen sharply from 9.5% in 2022-23 to 4.9% in 2023-24. Better still, GDP growth seems to have been a major contributor to the fall, says a recent paper by C Rangarajan, former RBI governor, and S Mahendra Dev, chairman, Institute for Development Studies, Andhra Pradesh.

So, we have some way to go before we get that 4th-largest-economy tag. But, as the fastest-growing major economy, we'll get there soon enough. And with a close-to-zero poverty ratio. That's something worth bragging about, far more than the 4th-largest tag.