The Indian economy is expected to have grown 7.4% in the December quarter from the year before, with estimates ranging from 7% to 8.7%, according to an ET poll. Festive season demand, aided by goods and services tax (GST) rationalisation, supported activity. Economists caution that the estimates could be revised as the statistics ministry unveils the new GDP series with FY23 as the base year on February 27. Anoushka Sawhney takes a look at the numbers:
Sectoral Drivers of Growth
Robust Growth Led By:
- Rural and urban consumption
- Manufacturing boost from GST cuts
- Improvement in the services sector
Economy Remains Resilient Amid Global Headwinds:
- Domestic demand remains supportive
- Services sector stays strong
- Economists see FY26 growth broadly steady
Sequential Slowdown, But Outlook Steady
Growth is projected at 7.4% for FY26, while the Reserve Bank of India (RBI) has projected 7.4%, with economic surveys pegging growth at around 7%.GDP growth trend (y-o-y):
- 9.2% in 2023–24
- 6.5% in 2024–25
- 7.4% in 2025–26 (first advance estimates)
There was a sequential slowdown from 8.2% in Q2 FY26, attributed to an unfavourable base effect, contraction in government capex and moderation in export growth. However, high-frequency indicators suggest improved growth momentum in Q3.
New GDP Series: What’s Changing
- Base year revised to FY23 from FY12; release of revised annual and quarterly figures
- New data sources: GST, e-Vahan
- Shift to double deflation in manufacturing
- Better informal sector measurement using unincorporated sector enterprises survey, periodic labour force survey
- Wider coverage of autonomous and local bodies
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