The new GDP series released for this year and the preceding two fiscals — with the base year shifted from 2011-12 to 2022-23 — provides some reason for cheer in these war-torn, deeply anxious times. The second advance estimate under the new series pegs real growth rate at 7.6 per cent this fiscal, against 7.4 per cent in the first advance estimate under the old series. The new dataset not just confirms the essential soundness of the economy, but also reaffirms faith in the reliability of our statistics.
The Centre has responded well to criticism on the accuracy of India’s growth numbers (from the IMF in particular), by making methodological changes, incorporating high frequency data, such as GST collections, and weaving in survey findings with respect to employment and consumption. A real growth rate of 7.6 per cent for FY26 implies the same growth rate in Q4 as well. However, Q4 growth might dip on account of global headwinds; some analysts put it at 7.3 per cent. Likewise, the Centre’s expectation of 7.4 per cent growth in FY27 might need to be calibrated, if the war carries on. A feature of this fiscal year’s growth story has been the 11.5 per cent growth in manufacturing GVA, against 9.3 per cent in FY25 and 12.3 per cent in FY24. Agriculture has not fared too well, with GVA growth coming in at 2.4 per cent, against 4.2 per cent last year. Services GVA growth at 9 per cent marks an impressive rise over 7 per cent and 7.9 per cent, respectively, in FY24 and FY25. This could take a bit of a knock on global turbulence.
That said, the new GDP series does generate some food for thought. Real growth rates are up over the old series, but the actual size of the economy, or the nominal GDP, is down in each of these years. Nominal growth rates are not significantly different, but the new series’ estimates are less volatile. But the smaller size of the economy itself seems curious, given that the inclusion of new data, such as GST collections to bolster the corporate data base, the unorganised enterprises survey as well as diverse data sources for agriculture should have had a contrary effect. Nominal GDP is down by about 3.5 per cent in each of the three years in question. Private consumption is down by even more, while government expenditure and net exports are up. It is noteworthy that agriculture estimates have been bolstered by the inclusion of new data on fisheries, fodder and milk products. Yet, if the nominal GDP is lower, it perhaps suggests that the earlier process of extrapolation was not free of problems.
Besides including more datasets, the introduction of double deflators for output and input, respectively, to derive real GDP is a welcome improvement. It would reduce the distortions of using a single deflator with a WPI bias. Our GDP estimates, both real and nominal, should serve as accurate indicators for policymaking. India’s statistical system has been regarded as among the best. The latest changes will bolster this reputation.
Published on March 2, 2026