India's Q3 FY26 GDP Data Released Under New Series with 2022-23 Base Year
The Ministry of Statistics and Programme Implementation (MoSPI) has officially released the Gross Domestic Product (GDP) data for the third quarter of the financial year 2025-26 today at 4:00 PM. This marks a significant milestone as it is the first GDP dataset published under the newly revised series, which adopts 2022-23 as the base year instead of the previous 2011-12. The updated series is designed to provide a more comprehensive and accurate representation of India's economic performance, incorporating modern data sources and methodologies.
Key Features of the New GDP Series
The revised GDP series introduces several enhancements to improve the precision of economic estimates. It integrates data from administrative sources such as the Goods and Services Tax (GST) network, the e-Vahan database for vehicle registration, and household services including those provided by cooks, drivers, and domestic workers. This shift aims to better capture the contributions of the unorganized and household sectors, which were previously estimated through indicator-based extrapolation.
Additionally, the new series employs more detailed price adjustments by utilizing approximately 500-600 items from the Consumer Price Index (CPI) and Wholesale Price Index (WPI), compared to only 180 items in the old series. This change addresses criticisms from economists about the reliance on outdated deflators, thereby enhancing the accuracy of real GDP calculations. The framework also moves away from single deflators for manufacturing and agriculture, adopting double deflation methods where feasible to reflect price changes more accurately.
GDP Growth Expectations and Economic Context
According to a report by Union Bank of India, India's economic growth for Q3 FY26 is projected to remain robust at 8.3%, despite facing a high base effect from the previous year. This growth is supported by momentum following GST rate reductions and indicates sustained strength in the economy. Gross Value Added (GVA) is estimated to have strengthened to 8.0% in Q3 FY26, up from 6.5% in the same quarter last year, although slightly lower than the 8.1% recorded in Q2 FY26.
Nominal GDP growth, however, is expected to have moderated to 8.5% in Q3 FY26, down from 8.7% in the previous quarter and 10.3% in the corresponding period last year. This decline is primarily attributed to a softening in inflation, as reflected in the GDP deflator. The release also includes revised numbers for the past four years based on the new series, providing a recalibrated historical perspective on India's economic trajectory.
Significance and Global Implications
Today's data release holds considerable importance as it may signal that India has overtaken Japan to become the world's fourth-largest economy in nominal terms. India has been the fastest-growing major economy for several consecutive quarters, and this update could solidify its position on the global stage. The International Monetary Fund (IMF) has previously criticized India's GDP calculation methodology for using outdated base years, and this revision aligns with efforts to present a more accurate economic picture.
Looking ahead, the IMF predicts that India could ascend to become the third-largest economy by the end of this decade, trailing only the United States and China. In terms of Purchasing Power Parity (PPP), India already ranks as the third-largest economy globally. The back-series data under the revised framework is anticipated to be published by December 2026, offering further insights into long-term economic trends.
Conclusion
The introduction of the new GDP series with a 2022-23 base year represents a pivotal step in enhancing the reliability and relevance of India's economic statistics. By incorporating advanced data sources and refined methodologies, it aims to better reflect structural changes in the economy, such as the impact of GST and digitalization. As India continues its rapid economic growth, this updated framework will play a crucial role in informing policy decisions and global economic assessments.
