Good news on the economic front, GDP growth in the third quarter was 7.8%
The government's GDP growth rate for the third quarter of fiscal year 2026 was 7.8%. This figure is higher than expected and also represents an increase on a year-on-year basis.
India's economy grew at a 7.8% pace in the December quarter, higher than the 7.4% estimate. The country's economic data was revised during this period, and increased demand during the festive season boosted production. GST reductions across various sectors also supported the economy.
A year ago, in the same quarter (based on a base year of 2011-12), the GDP growth rate was 6.2%. In the previous quarter, the growth rate was 8.2%. This means there has been a slight decrease compared to the previous quarter, but growth has been better than last year.
The latest figures have been released under a new base year. Now, the government has released GDP figures using 2022-23 as the new base year, instead of 2011-12.
The Ministry of Statistics and Program Implementation (MoSPI) has presented data using a revised framework.
Advance estimates for the fiscal year ending in March will also be released under this new system. It is believed that this could lead to a stronger economic outlook for India than previously estimated.
Manufacturing sector becomes the engine of growth
The manufacturing sector has been the mainstay of the economy for three consecutive fiscal years since rebasing. The latest data, released according to the new series, shows that the manufacturing sector has supported growth.
The government now estimates GDP growth to be 7.6% in fiscal year 2026. Previously, the first advance estimate in January, based on the old series, was 7.4%.
India GDP data: Key figures
The country's fiscal deficit will be ₹9.81 lakh crore by January 2026.
Total government expenditure in the first 9 months of FY26 (9M FY26) stood at ₹36.9 lakh crore.
Total receipts during the same period stood at ₹27.1 lakh crore.
Why was the base year changed?
This change in GDP is part of a larger process of updating the country's economic data. Recently, the government also changed the inflation data series to better understand changing spending patterns.
When growth is rebased, the weights assigned to different sectors change. This provides a clearer picture of the economy's progress over the past decade. The new series is likely to give greater weight to fast-growing sectors like the digital economy and gig work.
However, the share of sectors like agriculture and informal manufacturing may decline slightly. Overall, the new base year has revealed a new and more up-to-date picture of India's economy.
GDP