India's GDP Projected to Grow at 7.6% in FY26 After Base Year Revision

India’s real GDP is estimated to grow at 7.6 per cent in the financial year 2025-26, according to data released on Thursday by the Ministry of Statistics and Programme Implementation. The government pegged nominal GDP growth, which includes inflation, at 8.6 per cent, citing strong momentum in the second and third quarters as the primary driver.

The latest estimates indicate that the Indian economy expanded 8.4 per cent in the second quarter and 7.8 per cent in the third quarter of the current fiscal, sustaining its growth trajectory.

Strong Quarterly Performance

Data shows that real GDP grew 7.8 per cent in the October-December quarter. The sustained pace builds on growth rates of 7.2 per cent in 2023-24 and 7.1 per cent in 2024-25. Nominal GDP recorded expansions of 11.0 per cent in 2023-24 and 9.7 per cent in 2024-25, reflecting both real growth and price effects.

Officials attributed the resilience to broad-based sectoral performance. Manufacturing emerged as a key engine, delivering double-digit growth in 2023-24 and again in 2025-26 after rebasing. Secondary and tertiary sectors also supported the expansion, each registering growth above 9.0 per cent in 2025-26.

Base Year Revision

The Ministry of Statistics and Programme Implementation released a new series of annual and quarterly national accounts with 2022-23 as the base year, replacing the earlier 2011-12 series.

The ministry said base year revisions are undertaken periodically to reflect structural changes in the economy, incorporate updated data sources, and improve estimation methods and coverage. Unlike routine annual revisions, base year changes involve methodological updates and broader data integration.

FY2022-23 was chosen as the new benchmark as it represents a recent normal year after the COVID-19 disruptions and offers comprehensive sectoral data. The ministry is also revising the base year for key macroeconomic indicators such as CPI and IIP.

Economic Turnaround, Global Context

In late 2025, the International Monetary Fund assigned India a ‘C’ rating on national accounts, citing concerns over outdated base-year data. The shift to the 2022-23 base year addresses such concerns. Official figures show the economy grew 8.7 per cent in 2021-22 and 7.2 per cent in 2022-23, marking a steady post-pandemic recovery.

India’s economic position has strengthened over the past decade. From being ranked 11th in 2013-14, the country is now the fourth-largest economy globally.

In 2013, India was grouped among the so-called “Fragile 5” economies, a term coined by a Morgan Stanley analyst to describe emerging markets facing economic stress, including Brazil, Indonesia, South Africa and Turkey. Today, India is counted among the fastest-growing major economies, with the focus shifting toward raising per capita income alongside sustaining high growth.