Chief Economic Adviser V Anantha Nageswaran
| Photo Credit:
ANI
Chief Economic Advisor V Anantha Nageswaran on Friday said that India is on track to achieve the $4 trillion GDP mark by the end of the next fiscal year. This remark comes at a time when changes to the base year and the depreciation of the rupee have raised questions regarding India’s ambitions for higher economic growth.
Meanwhile, economists stated that the change in methodology will put criticism concerning the IMF’s downgrading of data quality to rest.
“Improved policy certainty resulting from successful trade agreements, including progress in India-US and India-EU negotiations, would support exports and capital flows. Impact will be more visible in next fiscal year,” he said while addressing a press conference following the release of a new series of National Accounts Estimates by the Ministry of Statistics and Programme Implementation (MoSPI).
“Lack of an AI story in Indian capital markets in 2025 was a handicap, and that this could be an advantage for capital flows in 2026,” he said, adding that as per projections, India is on track to cross the $4 trillion GDP mark in 2026-27.
Economists’ View
Meanwhile, economists said that despite the change in nominal GDP, the fiscal deficit in absolute terms will not change, though the ratio will be revised upwards.
DK Srivastava, Chief Policy Advisor at EY India, said that on a current-price basis, nominal magnitudes for 2023-24 to 2025-26 are lower than those under the old series.
This also means the overall size of the economy now appears smaller — for instance, nominal GDP for 2025-26 is ₹345.5 lakh crore in the new series, versus ₹357.1 lakh crore earlier. “Since fiscal deficit is calculated as a share of GDP, a lower GDP base automatically pushes the ratio up, raising the 2025-26 (RE) fiscal deficit estimate from 4.36 per cent to 4.51 per cent of GDP even though the deficit amount itself is unchanged,” he said.
Noting several methodological improvements — such as the relative weights of output sectors and demand segments, better coverage through the use of additional and more disaggregated data (including GST data), and improved methods for scaling up the economic activities of the informal sector and companies not covered by the MCA database — Srivastava expects an improvement in data ratings.
“These changes would improve India’s rating of the NSO data from category ‘C’ to a better category in terms of the IMF framework of assessing the reliability of a country’s national income statistics,” he said.
Digital shift
According to Rumki Mazumdar, Economist at Deloitte India, the revised GDP framework also reflects how India’s economy has evolved over the past decade, particularly with the rise of digital and platform-based services such as shared mobility, OTT platforms, and e-commerce, which were far smaller in the earlier base year. The new methodology incorporates a much wider set of administrative datasets, including GST transaction data, e-Vahan vehicle registrations, and other digital records, allowing economic activity to be captured more comprehensively.
While stronger manufacturing growth was expected given the robust IIP performance during the quarter, the revised GDP series suggests that the sector has been performing even better than previously estimated.
“Under the earlier series, manufacturing growth in Q1 and Q2 FY2026 was estimated at 7.7 per cent and 9.1 per cent, but in the new series this has been revised sharply higher to 10.6 per cent and 13.2 per cent. This indicates that manufacturing momentum over the course of the year has been stronger than earlier assessments suggested,” she said.
Published on February 27, 2026