New GDP series lifts FY26 growth estimate; Q3 growth at 7.8%

India’s GDP growth estimate has been revised to 7.6 per cent for the current fiscal following a revamp of the calculation framework, up from 7.4 per cent under the previous series.

The Ministry of Statistics and Programme Implementation (MoSPI) on Friday released a new series of national accounts with base year 2022–23, replacing 2011–12. This is the ninth base revision of the GDP series.

“Real GDP or GDP at Constant Prices is estimated to attain a level of Rs 322.58 lakh crore in the FY 2025-26, against the First Revised Estimate (FRE) of GDP for the year 2024-25 of Rs 299.89 lakh crore. The growth rate in Real GDP during 2025-26 is estimated at 7.6 per cent as compared to 7.1 per cent in 2024-25,” MoSPI said.

GDP growth for the October-December quarter of FY2025-26 stood at 7.8 per cent, up from 7.4 per cent a year earlier, but lower than 8.4 per cent in the second quarter. Q2 growth has been revised up to 8.4 per cent from 8.2 per cent, while Q1 has been lowered to 6.7 per cent from 7.8 per cent.

Nominal GDP is estimated to grow by 8.6 per cent in 2025-26.

MoSPI said the economy recorded real GDP growth of 7.2 per cent and 7.1 per cent in 2023–24 and 2024–25, respectively, while nominal GDP grew by 11 per cent and 9.7 per cent.

“Manufacturing sector has been the major driver in contributing to the resilient performance of the economy in consecutive three financial years after rebasing. This sector has attained double-digit growth rates in 2023-24 and 2025-26,” MoSPI said.

The ‘Trade, Repair, Hotels, Transport, Communication and Services related to Broadcasting, Storage’ sector grew by 10.1 per cent in 2025-26. On the demand side, both Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) grew by more than 7 per cent.

The revised methodology incorporates data from Goods and Services Tax (GST), Public Finance Management System (PFMS) and e-Vahan, introduces double deflation for manufacturing and agriculture, and uses more granular deflators. Household sector estimates will now be based on annual surveys such as ASUSE and PLFS.

Chief Economic Advisor V Anantha Nageswaran said the growth projection for 2026-27 has been revised to 7-7.4 per cent. “The economy is more likely to achieve a number closer to 7.4 per cent rather than 7 per cent,” he said, adding that nominal GDP growth could be close to 11 per cent and the economy would cross USD 4 trillion.

Aditi Nayar, Chief Economist, ICRA Ltd, said Q3 growth moderation was driven by agriculture and non-manufacturing sectors.

“The moderation was expectedly driven by the agriculture and the non-manufacturing industrial sectors, including mining, electricity and construction segments. Encouragingly, manufacturing GVA expanded by double digits for the fifth consecutive quarter in a row in Q3 FY2026, while services GVA growth inched up to a 7-quarter high of 9.5 per cent from 9.3 per cent in the previous quarter,” she said.

She added that the revised series shows nominal GDP for FY2024 and FY2025 is about 3.8 per cent lower than earlier estimates, implying a fiscal deficit target of 4.46 per cent of GDP for FY2027 compared to 4.3 per cent in the budget.

ICRA has projected GDP growth of 7 per cent for 2026-27 and indicated a higher likelihood of a pause in interest rates.