New Delhi, Feb 27 – The projected economic growth for the next fiscal year has been revised upwards to 7-7.4 percent, and the GDP size will comfortably exceed the USD 4 trillion mark, Chief Economic Advisor V Anantha Nageswaran said on Friday.
The Economic Survey presented in Parliament in January had projected a growth rate of 6.8-7.2 percent for the fiscal year 2026-27.
The Ministry of Statistics and Programme Implementation (MoSPI) is releasing the new series of annual and quarterly National Accounts Estimates with a base year of 2022–23, replacing the previous series with a base year of 2011–12.
"...we are revising our GDP growth outlook for FY27 from 6.8 to 7.2 percent to 7 to 7.4 percent under the new series...the economy is more likely to achieve a number closer to 7.4 percent rather than 7 percent," Nageswaran said while addressing a press conference on the release of the new series of national accounts or GDP.
He also said that based on current indicators, nominal GDP growth would be close to 11 percent and the size of the economy would comfortably exceed the USD 4 trillion mark in the next financial year.
Nageswaran also asserted that the Indian economy continues to maintain strong growth momentum, supported by broad-based activities.
According to the new series, GDP is likely to grow at 7.6 percent during 2025-26, up from 7.1 percent in the previous fiscal.
MoSPI Secretary Saurabh Garg said the main reason for changing the base year was that the number of data sources has increased, and there was a need to properly incorporate these new data sources into GDP calculations.
Additionally, he said, there have been structural changes in the economy over the past 10 years, with significant growth in the digital economy, leading to the availability of various new data sources, such as GST and vehicle-related data.
"There have also been certain methodological changes. With the objective of 'data for development’, this base revision has been undertaken to ensure that the picture we present of the economy is accurate and reflects our progress correctly,” he said.
Speaking about the March quarter GDP growth, Nageswaran said, momentum in the economy is good enough to give a growth rate of 7.3 percent or more during the period.
According to the second advance estimates, the Indian economy witnessed a growth rate of 6.7 percent in Q1, 8.4 percent in Q2 and 7.8 percent in Q3.
All parameters are good enough to give a growth rate of 7.6 percent in FY26 as per the new series, he said, adding, most of high frequency data are maintaining good momentum.
On the external side, he said, there was a merchandise export in January reflecting US trade-related uncertainties.
Overall, he said, the outlook for the economy continues to maintain strong growth supported by broad-based activity.
Favourable supply-side conditions, including robust Rabi sowing, comfortable foodgrain stock and easing global commodity prices, are expected to keep inflation low and stable, he said.
He further said that fiscal consolidation will be on track in the light of 2022-23 base year GDP revision.
With the nominal GDP being lower by roughly Rs 12 lakh crore, the estimated fiscal deficit for 2025-26 will now be 4.5 percent, but other indicators, such as primary deficit, revenue deficit or effective capital expenditure or capital expenditure to GDP ratios are expected to remain unchanged.
The Budget presented earlier this month had projected a fiscal deficit to be 4.4 per cent of the GDP for the current financial year ending March.
He hoped that successful trade agreements, including India-US and India-EU, will support exports and capital flows.
Nageswaran said that the per capita income has grown by 6.3-6.4 percent in real terms in the last three years. In nominal terms, the growth rate would be about 3 percentage points higher.
Observing that India has recorded consecutive years of over 7 percent GDP growth, he said the country has outperformed many economies facing high debt and slower expansion in the post-COVID period.
Manufacturing has shown strong growth, agriculture's share has edged up, and services have moderated slightly, he said, adding, investment remains resilient, private consumption is steady with strong rural demand, and the investment ratio has improved.
"Capital formation is robust, with machinery and equipment investment growing strongly, including over 10 percent growth among unincorporated enterprises. With solid momentum in the first three quarters, achieving 7.6 percent full year growth appears feasible," he added.
