By Saumitra Bhaduri, Professor, Madras School of Economics
The ministry of statistics and programme implementation has released a new GDP series with 2022-23 as the base year. It has also published revised data for the previous years. This follows the update of the inflation basket earlier this month to better reflect current spending patterns. These changes are not routine revisions. They mark a reset in how India measures its economy in a rapidly evolving data environment.
Under the new base series, real GDP growth for FY26 is estimated at 7.6%, with nominal GDP growing at 8.6%, both revised upward from the first advance estimates of 7.4% and 8% on the earlier 2011-12 base. The upward revision reflects stronger-than-expected momentum in the second and third quarters, with real growth reaching 8.4% and 7.8%. The new number also indicates the economy has shown sustained growth over the past two years, recording real growth of 7.2% in FY24 and 7.1% in FY25, alongside nominal growth of 11% and 9.7%. The rebased series places greater emphasis on manufacturing and services, with the manufacturing sector recording double-digit real growth of 12.3% in FY24 and 10.6% in FY26. In contrast, under the 2011-12 base estimates, manufacturing growth for FY24 was assessed lower at around 9%, and the first advance estimate for FY26 did not indicate double-digit expansion.
The revised series, with improved deflation methods and updated sectoral weights, thus presents a stronger manufacturing performance than reflected earlier. The secondary and tertiary sectors both recorded growth above 9% in FY26, while the broad trade, repair, hotels, transport, and communication segment grew by 10.1% in real terms. Finally, in the new base series, both private final consumption expenditure (PFCE) and gross fixed capital formation are estimated to have grown by over 7% in FY26, signalling a similar trend in demand and investment. With the new base, the rate of gross capital formation to GDP at constant prices was 34.9% in FY24 and 34.6% in FY25, while PFCE is 56.5% for both FY24 and FY25.
The new GDP numbers remain optimistic, and headlines will naturally focus on whether growth looks higher or lower than before. A deeper issue is whether the new series captures today’s economy more clearly and accurately than the old one.
The combined data (see graphic) shows that the rebasing significantly alters GDP levels and modestly changes growth rates. The question remains whether this large shift is driven by updated price weights and methodological improvements, or a sudden jump in output.
Nominal GDP levels too change, albeit less dramatically. Growth rates, however, show moderate revisions. Thus, overall, the rebasing mainly affects measurement levels and sectoral composition, while preserving the broader macro narrative of steady 7-8% real growth in recent years.
GDP is a construct built from surveys, tax records, corporate filings, and price data. When the methodology changes, the picture it presents can also change. The economy does not suddenly grow faster or slower, but our understanding of its performance can shift in meaningful ways.
India has revised its base year many times since Independence. Weights and methods are updated regularly so that GDP reflects the current structure of the economy. The last major revision came in 2015, when the base year moved to 2011-12. That change altered past growth rates and sparked debate.
While following the same international accounting framework as advanced economies, India faces challenges rooted in its structural features. A much larger informal sector means many small enterprises do not maintain detailed accounts, compelling statisticians to rely heavily on surveys, benchmark ratios, and extrapolations, unlike developed countries where most economic activity is formal and well documented. Advanced economies operate long-established high-frequency business surveys and integrated administrative databases, whereas India’s systems, though greatly strengthened after the introduction of GST and expanded digital reporting, still contend with coverage gaps. Revision practices also differ. In developed economies revisions are institutionalised and routine, while in India base-year updates have been less frequent and often draw greater public scrutiny even as authorities signal a shift towards revisions roughly every five years. Price measurement presents another challenge, as advanced economies maintain highly granular sector-specific indices, while India continues to refine its capacity to capture regional and sectoral price variations.
That gap is narrowing as India expands its use of GST filings, digital payments data, and corporate databases, and adopts methods such as double deflation and improved quarterly benchmarking to bring its practices closer to global standards. The new GDP series, therefore, marks a clear step in that direction.
It is a recognition that since the old base, the economy has changed profoundly. India introduced the GST, digital payments and online platforms expanded rapidly, renewable energy gained scale, and the pandemic reshaped jobs, supply chains, and consumption patterns. Households and firms adapted in ways that altered the structure of output and demand. Shifting the base year to 2022-23 anchors GDP in a more recent reality, assigning greater weight to sectors that have grown and less to those that have slowed.
India’s new GDP series introduces several important methodological changes aimed at improving accuracy and relevance. The updated base year better reflects the post-pandemic structure of the economy. It improves the compilation of the private corporate sector by separating different lines of activity within multi-activity enterprises, ensuring output is assigned more precisely across industries. Coverage of the unincorporated sector has been enhanced through the use of annual survey data, allowing regular updates that better capture changes in small and informal enterprises. The series also incorporates updated rates and ratios drawn from recent surveys and methodological studies undertaken with expert institutions. Specifically, the PFCE has been improved by integrating both survey and administrative data sources. It extensive uses GST and other administrative databases to strengthen quarterly estimates. Finally, discrepancies between production and expenditure estimates have been reduced by integrating the Supply and Use Table framework, ensuring better alignment across different sides of the national accounts.
A key improvement aims at wider use of double deflation, which adjusts input and output prices separately to gauge real value added more accurately. This reduces distortions, especially in sectors like manufacturing where input and output prices often move differently. Earlier, many sectors relied on single deflation due to data constraints, which could blur the distinction between price and volume changes. The long-standing limitation is now addressed. The new framework also aims to replace older benchmarking techniques for quarterly GDP with the proportional Denton method, which aligns quarterly estimates more smoothly with annual totals and avoids artificial spikes or breaks while preserving short-term trends from high-frequency indicators. Finally, the release of back-series data under the revised methodology ensures continuity, allowing analysts to compare trends over time without breaks in the statistical series.
These improvements are particularly significant in light of the IMF’s November 2025 assessment which highlighted methodological weaknesses in India’s national accounts and assigned a “C” rating, indicating shortcomings that could hamper effective surveillance.