India’s economic growth showed signs of moderation in the latest national accounts, even as methodological changes under the new base series present a stronger picture of the economy’s size and structure.
According to the revised data released by the Ministry of Statistics and Programme Implementation, GDP growth eased to 7.8% in Q3FY26 from 8.4% in the previous quarter. For the full financial year FY26, growth stood at 7.6% under the new series.
The rebasing exercise has significantly altered past estimates. FY24 growth has been revised down to 7.2% from 9.2%, while FY25 has been revised up to 7.1% from 6.5%. Importantly, the overall level of real GDP is now markedly higher due to improved data coverage and methodological refinements. FY23 real GDP is estimated at Rs 261 lakh crore under the new base compared with Rs 161 lakh crore earlier, while FY25 GDP is pegged at Rs 300 lakh crore versus Rs 188 lakh crore in the 2011-12 series.
Manufacturing powers expansion
Manufacturing has emerged as the principal growth engine following the rebasing. The sector recorded double-digit expansion in FY24 (12.7%) and FY26 (11.5%). Quarterly performance in FY26 has also remained robust, with growth of 10.6% in Q1, 13.2% in Q2 and 13.3% in Q3.
The improved estimates stem partly from methodological upgrades. Unlike the old series that relied largely on single deflation, the new framework increasingly uses double deflation in manufacturing, allowing separate price adjustments for inputs and outputs. Where data gaps persist, volume extrapolation and more granular deflators — such as commodity-level Unit Value Indices for trade — have been introduced.
Macro ratios shift
Revisions have also reshaped macro indicators. Savings and investment ratios have moved higher, with the FY24 savings rate now at 32.8% and the investment rate at 34.5%. However, nominal per capita GDP has declined modestly, and fiscal deficit ratios for FY23–FY27 have been revised upward, with FY26 now estimated at 4.8% of GDP.
The new series also provides clearer visibility on statistical discrepancies between expenditure- and production-side GDP estimates, an issue that had long complicated interpretation of the earlier 2011-12 base data.
