INDIA’S economy grew faster than China’s in the quarter through March, data showed Friday, but a sharp downward revision for the previous quarter fuelled doubts about the accuracy of a new method used to measure economic activity.

    Asia’s third-largest economy grew 7.5 percent year on year in the last quarter, according to the data, outstripping China’s 7 percent growth in the same quarter and beating a Reuters poll of economists who forecast 7.3 percent growth.

    India also celebrated faster growth than its larger neighbor in the December quarter, but Friday the Central Statistics Office sharply revised growth down to 6.6 percent from 7.5 percent, further distorting the picture.

    “At face value, today’s GDP figures for (January-March) suggest that India is the fastest-growing major economy in the world,” said Shilan Shah, India Economist at Capital Economics.

    “In reality though, the GDP data remain wildly inconsistent with numerous other indicators that point to continued slack in the economy.”

    Economists were already having a hard time reconciling the headline numbers with dismal corporate earnings, weak industrial activity and an elusive recovery in bank credit.

    Full-year growth for the fiscal year ending in March came in at 7.3 percent, Friday’s data showed, up from 6.9 percent in 2013/14, a tad lower than an official estimate of 7.4 percent.

    Back in December, the government estimated growth for the year would be 5.5 percent using the old methodology. That would have represented a modest improvement after two successive years of growth below 5 percent — the worst in a quarter century.

    But the reworking of the numbers has transformed India’s official growth pace under Prime Minister Narendra Modi.

    The new method measures economic activity by market prices instead of factor costs, taking into account gross value addition in goods and services as well as indirect taxes.

    Government statisticians say this conforms with global practice and helps demonstrate structural changes in the economy.

    However, they failed to explain several gaps in the new GDP data, leading to confusion that risks wrong-footing financial markets and policymakers.

    Friday’s data compounded the problem. Headline GDP accelerated from the previous quarter but another measure of economic activity in the data showed growth slowed.(SD-Agencies)