New Delhi, Sept. 10 -- Every release of India's gross domestic product (GDP) data generates intense debate. Analysts pore over decimal points, commentators point to perceived inconsistencies and critics claim statistical sleights of hand.

Much of this noise, however, reflects a basic misunderstanding of how quarterly GDP is estimated and how to interpret related price measures such as the GDP deflator.

A thread which runs through many analysts' reasoning is that GDP is first estimated in nominal terms (or current prices) and then converted to constant prices by applying a deflator. Another is that India's choice of a deflator underestimates 'true' inflation, so applying a 'low' deflator to nominal GDP overstates real or constant-price G...