Why IMF Gave India A ‘C’ & Why Nirmala Sitharaman Says It Doesn’t Hurt India’s Growth Story

New Delhi: Finance Minister Nirmala Sitharaman on Wednesday hit back at the Congress leaders who took a jibe at the government over the IMF's annual review of India's national accounts statistics giving the data Grade 'C' and asserted that the IMF report does not question the growth figures. She said that Grade C was assigned because the data is based on an outdated base year, 2011-12, and the new base year will be 2022-23 from next year.

Sitharaman made the remarks during her reply in to the debate on the Central Excise (Amendment) Bill, 2025, which was later passed by the Lok Sabha. The bill is aimed at increasing excise duty on tobacco products and their manufacturing after a discussion.

The Minister said the IMF report focuses mainly on India's overall healthy economic performance and the ratings given by the IMF are part of its report on the Indian economy, which expects India's GDP to grow at 6.5% in 2025-26.

"It recognises growth in the private sector, macroeconomic stability and the resilience of the Indian financial sector. These are identified as key drivers of growth. The IMF also notes that inflation is well below the RBI's tolerance band and is projected to be 4.3% for the full year," she said.

"The point of contention was the quality of data on which the 'C' grade was given. The 'C' grade is assigned to the National Accounts data because it is based on an outdated base year - 2011-12. However, the Government of India is now updating the base year, and from next year, the new base year will be 2022-23. This will come into effect from February 27, 2026. So, the data currently being used is based on the 2011-12 base year, and it is solely for this reason that we have been given a 'C' grade. The IMF report does not question the growth figures," she added.

India's real GDP has been estimated to have grown by 8.2 per cent in the July-September quarter of the current financial year 2025-26 over the growth rate of 5.6 per cent in the same quarter of the previous fiscal, according to official data.

The National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), released the Quarterly Estimates of Gross Domestic Product (GDP) for the July-September quarter last month.

Sitharaman said that according to NHA data, between 2014-15 and 2021-22, government health expenditure (GHE) as a percentage of GDP rose from 1.13% to 1.84%.

She said government health expenditure (GHE)'s share of overall government spending also increased from 3.94% to 6.12%. Between 2014 to 2022, per-capita health spending tripled from Rs 1,108 to Rs 3,169.

"Under the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana, providing financial protection to nearly 55 crore beneficiaries. There have been 9+ crore hospital admissions, resulting in Rs 1.3+ lakh crore worth of free treatments. More than 16,000 Jan Aushadhi Kendras, now present in almost all districts, provide quality generic medicines at affordable prices - often 50-90% cheaper than market rates," she said.

"Under various phases of Mission Indradhanush, 5.46 crore children and 1.32 crore pregnant women have been vaccinated against 12 diseases. This targeted initiative contributed to a significant decline in the Maternal Mortality Ratio, from 130 per lakh live births (2014-16) to 80 (2020).

Over the last eleven years, the government has approved or established new AIIMS across several states and set up many new medical colleges, including the first AIIMS in the Northeast, located in Assam. MBBS seats have increased to 1.18 lakh, and 74,000 PG seats have been added since 2014," she added.

The government is bringing back the excise duty which existed priority to the GST system, she said. The minister said because of various initiatives taken by the government, acreage under tobacco cultivation of over 1.12 lakh acres (45,323 hectare) moved to other crops between 2018 to 2021-22. It has shifted to sugarcane, groundnut, oil palm, cotton, chilli, maize, onion, pulses, and turmeric, she said.

Sitharaman introduced two bills in Lok Sabha on Monday, the first day of the Winter session of Parliament. She introduced the Central Excise (Amendment) Bill, 2025, and Health Security se National Security Cess Bill, 2025, in Lok Sabha.

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