The Ministry of Statistics and Programme Implementation (MoSPI) on Friday released the New Series of Annual and Quarterly National Accounts Estimates with a base year of 2022-23, which replaces the previous series with a base year of 2011-12. This is the 9th base year revision of the GDP series.
According to the new series, the real gross domestic product (GDP) in the October-December quarter of 2025-26 grew by 7.8 per cent, up from 7.4 per cent in the year-ago period, mainly driven by the manufacturing and services sectors.
According to BofA Global Research, the bigger surprise was the downward revision in the nominal GDP base for FY26 from the earlier estimate of Rs 357 lakh crore to Rs 345 lakh crore.
This was against the expectation that the nominal GDP base was more likely to be revised higher, but the downward revision will push the fiscal deficit and debt estimates modestly higher, it said.
Nominal GDP includes changes in prices caused by inflation, reflecting the impact of rising overall price levels, while real GDP is an inflation-adjusted measure that evaluates the value of all goods and services produced in a country during a specific year.
The downward revision in nominal GDP to Rs 345.5 lakh crore from the government’s budget estimate of Rs 357.1 lakh crore could push the FY26 fiscal deficit to 4.5 per cent, slightly higher than the earlier expectation of 4.4 per cent, CareEdge Chief Economist Rajani Sinha said. Furthermore, Sinha said, with the budgeted 10 per cent growth over the new nominal GDP, the fiscal deficit for FY27 comes at 4.5 per cent, higher than the budgeted 4.3 per cent.
For the fiscal math, the size of the economy is modestly smaller than budgeted earlier, implying the pace of increase to reach the FY27 budgeted size will need to be stronger than the projected 10 per cent year on year basis to maintain the 4.3 per cent of GDP target, DBS Bank senior economist Radhika Rao said.
Deloitte India Economist Rumki Majumdar said the new methodology incorporates a much wider set of administrative datasets, including GST transaction data, e-Vahan vehicle registrations, and other digital records, allowing economic activity to be captured more comprehensively.
Speaking on the issue, Crisil Ltd Chief Economist Dharmakirti Joshi said the new series pegs gross domestic product (GDP) growth for this fiscal at 7.6 per cent, up from the 7.4 per cent in the first advance estimate (FAE) based on the old series, and 7.1 per cent last fiscal.
“The new series underlines private consumption as the leading driver of growth this fiscal, while the FAE under the older series called out fixed investments. Growth for last fiscal has also been raised significantly from 6.5 per cent in the old series,” he said.
The size of the economy – measured by nominal GDP – is smaller at Rs 345 lakh crore, compared with Rs 357 lakh crore under the old series for this fiscal, putting India economy slightly below USD 4 trillion.