4 min readNew DelhiFeb 27, 2026 07:29 PM IST
The Indian economy’s growth rate is expected to be higher in 2026-27 under the new GDP series released on Friday, with Chief Economic Advisor V Anantha Nageswaran raising the forecast to 7-7.4%. Speaking to the media after the Ministry of Statistics and Programme Implementation’s (MoSPI) new GDP series showed growth in 2025-26 is seen 20 basis points (bps) higher at 7.6% compared to the first advance estimate of 7.4% under the old 2011-12 base year series, released in January, Nageswaran added that the risks to the improved growth projections were to the “upside”.
“The Economic Survey had projected a real GDP growth range of 6.8-7.2% on January 29. We were waiting for the benchmark revisions to come through and subsequent to the Economic Survey and the Budget presentation, we also have had the framework agreement with the United States arrived at, etc. And, therefore, we are increasing our GDP growth outlook for FY27 from 6.8-7.2% previously to between 7% and 7.4% under the new series,” the government’s top economist said.
“At the moment, we feel that the risk is on the upside in this range, that is the economy is more likely to achieve a number closer to 7.4% rather than 7%. Of course, global uncertainties are the downside risk factor to keep in mind,” he added.
Along with a new base year, the revamp of the GDP data by the statistics ministry has also involved several methodological changes, chief among them being the so-called single-deflator method not being used at all to adjust nominal GDP to arrive at real GDP. This is seen to represent a more accurate picture of real growth rates across the economy.
While a full GDP back-series is awaited, data released on Friday by MoSPI showed that growth for 2023-24 has been revised down sharply to 7.2% from 9.2% under the old series, while the figure for 2024-25 has been raised to 7.1% from 6.5%. Pointing at these numbers – along with the 7.6% second advance estimate for the current fiscal – Nageswaran said that three consecutive years of 7% plus GDP growth “corroborates and vindicates” the Economic Survey’s decision to revise India’s potential GDP growth rate to around 7%.
The second advance estimate implies that the GDP must grow by at least 7.3% in the last quarter of 2025-26 for the full-year estimate of 7.6% to be achieved. According to Nageswaran, the momentum in the economy is “good enough to deliver us that 7.3% growth rate in the fourth quarter”.
Investment dynamism
The new GDP series’ numbers, the Chief Economic Advisor argued, showed that investments had held up well at a time of global uncertainty.
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As per the data released on Friday, the share of Gross Fixed Capital Formation – a proxy for investments – has remained around 32% of GDP since 2022-23. “To be able to maintain a 30% plus Gross Fixed Capital Formation (share) at the aggregate level in the economy in the current global context is a very respectable and creditable achievement on the part of the Indian economy given global excess capacity and uncertainty, etc.,” Nageswaran said, adding that the data was also indicative of “dynamism” outside the formal economy.
“The interesting and encouraging news is that unincorporated enterprises have maintained a growth rate of more than 10% (in current prices) on investment in machinery and equipment. So, I think that is a sign of dynamism in terms of the investment. We don’t have to only look at the incorporated sector to understand the dynamism that we see in the overall economy,” he said.
Economists have widely said that the private investment cycle was yet to take off, with the global policy uncertainty and weaknesses in certain segments of domestic demand not providing enough confidence to industry to spend to expand capacities. According to Nageswaran, while private consumption growth is “quite resilient” and rural consumption has been “quite strong”, urban consumption is recovering on the back of the direct and indirect tax cuts announced last year.
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