NEW DELHI: India’s economic growth estimate was raised to 7.6 per cent for the current fiscal on Friday following a revamp of the GDP calculation framework, underscoring the resilience of the world’s fastest-growing major economy amid global trade disruptions.
The growth forecast for the fiscal year ending March, released by the National Statistics Office (NSO), compares to the previous estimate of 7.4 per cent under the old data series, and 7.1 per cent in the previous 2024-25 fiscal year.
The calculation revamp, which included a change of base year to 2022-23 and improved capture of faster-growing segments of the economy, however, led to a moderation in real GDP growth in October-December (the third quarter of the current 2025-26 fiscal year) to 7.8 per cent from 8.4 per cent in Q2.
The methodological overhaul, aimed at addressing concerns over outdated data practices and improving accuracy, is expected to better reflect updated production structures, expand sectoral coverage, incorporate revised ratios, and utilise more representative government datasets, including improved estimates of activity in the informal sector.
India’s nominal GDP growth for 2025-26 (April 2025 to March 2026 fiscal), which excludes the impact of inflation, is estimated to grow at 8.6 per cent.
In the budget for the financial year 2026-27, the government has estimated India’s nominal growth rate for the next year at 10 per cent under the old base year.
For much of the current financial year, the Indian economy had to contend with uncertainty from tariffs, which weighed on exports. The Modi government responded by overhauling GST.
which lowered taxes on hundreds of items, and implementing long-delayed labour reforms. These, together with the lower income tax burden, cut in interest rates, low inflation and strong rural demand, kept the momentum in the economy.
Earlier this month, New Delhi reached an interim agreement with Washington that reduces effective tariffs to 18 per cent from 50 per cent, before the US Supreme Court struck down President Donald Trump’s global tariffs.
India’s Chief Economic Adviser V Anantha Nageswaran said the economic growth projection for the next fiscal has been revised upwards by 20 basis points to 7-7.4 per cent following the release of the new GDP series.
The Economic Survey presented in Parliament in January projected a growth rate of 6.8-7.2 per cent for the fiscal year 2026-27.
“The economy is more likely to achieve a number closer to 7.4 per cent rather than 7 per cent,” he said, adding that based on current indicators, nominal GDP growth would be close to 11 per cent and the size of the economy would comfortably cross the USD 4 trillion mark.
Nageswaran also asserted that the Indian economy continues to maintain strong growth momentum, supported by broad-based activities.
According to NSO data, the service sector performance signalled a strong lift, especially the labour-intensive segments in FY26, besides a double-digit growth in manufacturing activity. As it stands, the October-December quarter also benefited from indirect tax rationalisation and festive demand, in addition to better faring rural farm sector.
Aditi Nayar, Chief Economist, ICRA Ltd, said the moderation in Q3 was expectedly driven by the agriculture and the non-manufacturing industrial sectors, including mining, electricity and construction segments.
“The data for FY2023-25 has been revised materially as per the new 2022-23 base. Notably, the size of the Indian economy is estimated to be somewhat smaller than that, as per the 2011-12 base; the nominal GDP for FY2024 and FY2025 is 3.8 per cent each, lower than that estimated in the old series,” she said. “More importantly, this would also imply a fiscal deficit target of 4.46 per cent of GDP for FY2027, as against the 4.5 per cent assumed in the budget, assuming a nominal GDP growth of ~10 per cent in the fiscal.”
Projecting a GDP growth of 7 per cent in the 2026-27 fiscal, Lara said there is a higher likelihood of a prolonged pause on the interest rate by RBI, amid expectations of a base-led uptick in the CPI inflation in the near term.
The Ministry of Statistics and Programme Implementation (MoSPI) on Friday released the New Series of Annual and Quarterly National Accounts Estimates with base year 2022-23, which replaces the previous series with a base year of 2011-12.
