India's Economic Growth and Revised GDP Estimates
India's economic growth for the financial year 2025-26 is anticipated to reach 7.6% as per the government's second advance estimates of GDP. This surpasses the earlier projection of 7.4% from the first advance estimates.
New Series of GDP Data
- The new data series incorporates an updated base year of 2022-23, replacing the earlier 2011-12.
- Several new data sets have been included to enhance representativeness and granularity.
Revised Growth Estimates
- The growth for 2023-24 has been revised downward to 7.2% from 9.2%.
- For 2024-25, it has been revised upward to 7.1% from 6.5%.
Impact on Fiscal Ratios
- Nominal GDP for the years 2023-26 has been revised downward, affecting fiscal ratios like fiscal deficit-to-GDP and debt-to-GDP.
- The revised fiscal deficit-to-GDP ratio is estimated at 4.51% for 2025-26, up from 4.36%.
Sectoral Growth Rates
- Secondary Sector: Expected to grow by 9.5%, driven by the manufacturing sector's growth of 12.5%.
- Primary Sector: Anticipated slowdown with a growth rate of 2.8%.
- Tertiary Sector: Growth to accelerate to 8.9%, with substantial contributions from trade, hotels, and communication (10.3%) and financial services (10%).
Economy Size and Future Projections
- The economy's size for 2025-26 is projected to be ₹345.47 lakh crore, which is 3.3% smaller than earlier predictions.
- Revised estimates for 2023-24 and 2024-25 show a 3.8% reduction each year.
- The debt-to-GDP ratio for FY27 is pegged at 57.5%, higher than the budgeted target of 55.6%.
Fiscal Policy Adjustments
- The government aims to reduce central government debt to 50% of GDP by 2031.
