Source The Hindu
NEW DELHI — In a significant overhaul of the nation’s economic scorecard, the Indian government on Friday released a new GDP series that raises the growth forecast for the current fiscal year (FY26) to 7.6%, up from the earlier projection of 7.4%.
However, the statistical recalibration—which shifts the base year from 2011-12 to 2022-23—reveals a leaner version of the Indian economy. While the growth rate is faster, the absolute size of the economy in nominal terms is now estimated to be roughly 3.3% smaller than previously thought.
The Numbers Behind the Shift
The Ministry of Statistics and Programme Implementation (MoSPI) introduced the new series to better reflect the modern structure of the economy, including the digital boom and the formalization of the informal sector.
FY26 Real Growth: Pegged at 7.6%, outpacing the 7.1% recorded in FY25.
Q3 Performance: For the October-December 2025 quarter, the economy expanded by 7.8%.
Nominal GDP: Estimated at ₹345.47 lakh crore ($3.8 trillion) for FY26, a downward revision from the ₹357 lakh crore estimated under the old series.
Why is the Economy “Smaller”?
The reduction in the absolute size of the GDP is primarily a result of updated data sources and improved “double deflation” methodologies. By using 2022-23 as a benchmark—a year that captures the post-pandemic reality—the government has filtered out outdated proxies.
While the “smaller” size might seem like a setback for India’s race to become a $5 trillion economy, economists argue the new data is more credible. “The levels have changed, but the momentum is stronger,” noted a report from SBI Research.
Fiscal Implications
The smaller nominal GDP base creates a tighter squeeze on government math. Because the fiscal deficit and public debt are measured as a percentage of GDP, a lower denominator means these ratios will automatically appear higher.
“This recalibration means the government’s path to debt reduction just became a bit steeper,” said D.K. Srivastava, Chief Policy Advisor at EY India. “We are seeing a more accurate, albeit slightly diminished, reflection of the total economic pie.”
Sectoral Highlights (FY26)
Sector Growth Rate (New Series)
Manufacturing 11.5%
Services (Trade/Hotels/Transport) 10.1%
Construction 7.1%
Agriculture & Allied 2.4
Despite the primary sector (agriculture) showing relative weakness at 2.4%, the manufacturing and services sectors remain the dual engines propelling India’s status as the world’s fastest-growing major economy.
