Deciphering how New India’s GDP landscape will be estimated, going forward…

The Ministry of Statistics and Programme Implementation (MoSPI) introduced a New Series of Annual and Quarterly National Accounts on February 27, 2026, with a base year of 2022-23. These periodic revisions are more significant than standard updates due to the fundamental structural changes they reflect in the national accounts.

India’s transition to the 2022–23 base year modernizes national accounting by integrating real-time data sources and aligning with UN SNA 2008 guidelines. This update aligns India’s economic reporting with international standards and provides a more accurate representation of the current economy.

I. Reason for the Shift, Key Features and Methodology

The main reason for the change in the base year is to capture current consumption patterns, integrate new data sources (such as GST, digital transactions, etc.), and remove obsolete products from the estimates.

The current revised GDP estimates feature significant enhancements mainly focused on improving accuracy. The key improvements include the segregation of activities within multi-activity enterprises and broader coverage of the unincorporated sectors, through annual surveys on a regular basis.

The adoption of double deflation and the Proportional Denton benchmarking method — which ensures quarterly data aligns perfectly with annual totals — further refines economic measurements. Moreover, the use of  GST data and updated consumption categories improves tracking of private spending. Overall, these changes create a more accurate and reliable framework for analysing economic trends.

II. Macroeconomic Overview: Real and Nominal Growth

In the fiscal year 2025-26, Real GDP is projected to grow by 7.6 percent, compared to 7.1 percent in 2024-25. And Nominal GDP is estimated at 8.6 percent in 2025-26 against 9.7 percent in 2024-25.

The revised figures show the strength of economic growth, with real GDP growth revised from 7.4 percent in the First Advance Estimates (FAE) (released in January 2026) to 7.6 percent in the recent Second Advance Estimates (SAE). Similarly, nominal GDP growth is revised from 8.0 percent in FAE to 8.6 percent in SAE. These adjustments reflect the economy’s resilience and the impact of more detailed data captured through the new 2022-23 base year.

III. Sectoral Performance Analysis (Where the Growth is)

The Gross Value Added (GVA) at basic prices shows growth across key sectors. The Primary Sector, which is led by Agriculture, Forestry, and Fishing, is estimated to grow by 3.1 percent, indicating stable rural performance despite broader macroeconomic shifts. In the Secondary Sector, both Manufacturing and Construction are estimated to maintain a steady momentum of 7.0 percent. The Services sector remains the primary driver, with Financial, Real Estate, and Professional Services projected to grow by 9.9 percent.

In 2024-25, the Gross Value Added (GVA) in the Primary Sector grew by 4.9 percent, up from 2.6 percent the previous year. The Secondary and Tertiary Sectors also witnessed growth rates of 8.0 percent and 7.9 percent, respectively. Data indicates that Manufacturing and Financial Services were the main drivers of growth. However, in Q3 of 2025-26, Agriculture, Livestock, Forestry, and Fishing experienced a decelerating growth rate compared to Q3 of 2024-25.

IV. Demand Side

At current prices, Private Final Consumption Expenditure (PFCE) is estimated to increase from ₹163.77 lakh crore in 2023-24 to ₹179.71 lakh crore in 2024-25, with the PFCE-to-GDP ratio remaining constant at 56.5 percent for both years. Similarly, at constant prices, PFCE is estimated at ₹157.85 lakh crore in 2023-24 and ₹167.00 lakh crore in 2024-25.

In real-term measurement, the PFCE-to-GDP ratio shows a slight decrease from 56.4 percent to 55.7 percent over the same period.

On the demand side, PFCE at constant prices is expected to grow by 7.7 percent in the current fiscal year, reaching an estimated ₹179.81 lakh crore. This surge in real-term consumption is the primary driver of the overall economic momentum recorded in the SAE.

The estimated growth of Gross Fixed Capital Formation (GFCF) for the fiscal year 2025-26 is 7.8 percent in real terms.  At current prices, GFCF is projected to reach ₹110.55 lakh crore, maintaining a stable 32.0 percent share of the GDP, thus supporting the momentum. And Government Final Consumption Expenditure (GFCE) is estimated to grow by 5.2 percent. This combined increase in investment and public spending is expected to support a 7.6 percent Real GDP growth.

This combined increase in investment and public spending supports the overall 7.6 percent Real GDP estimate.

Author’s Conclusion

The shift to the 2022-23 base year is more than just a statistical adjustment; it is a purposeful attempt to match the national accounts with the changing reality of a modernising economy. These new estimates, which incorporate direct digital data and use enhanced methodology, move away from the outdated proxies of the past and toward a more realistic depiction of India’s economic environment.

The latest estimates show a 7.6 percent Real GDP growth, which is a result of the dedication of all citizens, from rural farmers to urban experts. The new methodology captures ‘how’ these changes are measured, but the real ‘why’ comes from the collective efforts of millions. These changes provide an accurate and reliable lens through which to view the persistent vitality and progress of the entire nation.

But the new series is not without framework challenges. Given that the Wholesale Price Index (WPI) is yet be rebased, there are some discrepancies. The full economic reality will only come into focus following a WPI base year update or a shift toward a Producer Price Index (PPI); in the interim, certain data irregularities are likely to endure.