How the new GDP series could alter growth figures

NATIONAL STATISTICAL OFFICE (NSO) released the advance estimates for 2025-26, indicating annual GDP growth of 7.4%, with a decadal growth of 5.9% (2015-2026).

- R GOPALAN & MC SINGHVI

The growth is fairly robust, given the need for structural changes, global uncertainties and pandemic. This would be the last GDP estimates of the current series based on 2011-12 since in February 2026, the statistics ministry proposed to release new series with 2022-23 as base.

There are three key critical concerns, besides the dated base, that are expected to be addressed in the new series to make these estimates more realistic. We look at these concerns and their outcomes. Firstly, the new base proposes to use supply use tables (SUT) for eliminating the discrepancies in GDP estimates based on sector approach and the expenditure approach. SUT is available until 2022-23, the base year for the new series.

Major changes could occur in the expenditure side as the discrepancies get adjusted appropriately in consumption, investment and net trade. The two major components of expenditure-side GDP, Private Final Consumption Expenditure (PFCE)and Gross Fixed Capital Formation (GFCF) indicate a lower CAGR during 2015-16 to 2022-23 in the revised estimates based on SUT compared to original estimates, though the difference is not significant.