India's Economy Expands by 7.8% in Q3 FY 2025-26 Under New Statistical Framework
The Ministry of Statistics and Programme Implementation (MoSPI) has released data indicating that India's real GDP grew at a robust 7.8% in the third quarter of the financial year 2025-26. This marks the first GDP report under a revised national accounts series, which updates the base year for calculations from 2011-12 to 2022-23, aiming to provide a more accurate reflection of the contemporary economic structure.
Key Highlights from the Revised GDP Data
MoSPI's updated estimates, published on Friday, reveal several critical insights into India's economic trajectory:
- Annual Projection: For the full financial year 2025-26, GDP growth is now projected at 7.6%, a slight increase from the 7.4% advance estimate released in January. Nominal GDP is expected to rise by 8.6% during this period.
- Quarterly Revisions: The growth estimate for the July–September quarter of 2025-26 has been revised upward to 8.4% from the earlier 8.2%. Conversely, the April–June quarter estimate has been adjusted downward to 6.7% from 7.8%.
- Historical Context: The economy has demonstrated steady momentum, with real GDP growing by 7.2% in FY 2023-24 and 7.1% in FY 2024-25. Nominal GDP growth stood at 11.0% in FY 2023-24 and 9.7% in FY 2024-25.
- Sectoral Contributions: The manufacturing sector has emerged as a key driver of economic resilience, achieving double-digit growth in FY 2023-24 and again in FY 2025-26. Both secondary and tertiary sectors have strengthened, each recording growth exceeding 9% in FY 2025-26.
- Services Performance: Within services, the "Trade, Repair, Hotels, Transport, Communication and Services related to Broadcasting and Storage" category saw growth of 10.1% at constant prices in FY 2025-26.
- Expenditure Analysis: On the expenditure side, Private Final Consumption Expenditure and Gross Fixed Capital Formation each registered growth rates above 7% during FY 2025-26.
Implications of the Base Year Revision
The shift to a 2022-23 base year is significant as it incorporates more recent data on economic activities, potentially offering a clearer picture of India's growth patterns. This revision has led to adjustments in quarterly estimates, highlighting the importance of updated statistical methodologies in economic planning and policy-making.
The overall economic performance in FY 2025-26 has been bolstered by strong real growth in the second quarter at 8.4% and the third quarter at 7.8%, underscoring the economy's capacity to maintain expansion amid global uncertainties.
