India GDP Growth Revised to 7.6%: Second Advance Estimates & Fiscal Impact

India’s GDP growth for FY 2025–26 has been revised to 7.6% according to the Second Advance Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI).

• The revision is based on a new GDP series with base year 2022–23.
• The change affects key fiscal ratios like Fiscal Deficit-to-GDP and Debt-to-GDP, which are crucial for policy planning and fiscal consolidation.

Key Highlights

• Nominal GDP Revision:  India’s nominal GDP (size of the economy) has been revised downward for the years 2023–24 to 2025–26 under the new GDP series.
• Impact on Fiscal Indicators: A lower GDP base negatively impacts key fiscal indicators that use GDP as the denominator.
• Fiscal Deficit Implications:  Fiscal Deficit-to-GDP Ratio will increase even if the absolute fiscal deficit remains unchanged.
• Debt-to-GDP Implications: Debt-to-GDP Ratio will also rise due to the smaller GDP base.

Sector-wise Growth – FY 2025–26

Primary Sector (Agriculture & Mining)

• Expected growth: 2.8% (slowdown from 5% in 2024–25)
• Agriculture: 2.5%
• Mining & Quarrying: 5%
  • Reason: Lower growth in agriculture and resource extraction dampens rural and primary sector contribution.

Secondary Sector (Industry & Manufacturing)

• Expected growth: 9.5% (up from 7.3%)
• Manufacturing: 12.5% (major driver)
• Construction: 6.9%
  • Reason: Industrial revival and manufacturing push, key for “Make in India” initiative.

Tertiary Sector (Services)

• Expected growth: 8.9% (up from 8.3%)
• Trade, Hotels, Transport & Communication: 10.3%
• Financial, Real Estate, IT & Professional Services: 10%
  • Reason: It is due  to double-digit growth in the trade, hotels, transport and communication grouping (10.3%), and the financial, real estate, IT, and professional services grouping (10%). 

What are the Advance Estimates of GDP?

• Advance Estimates are official projections of GDP growth for the ongoing financial year, released before the year ends.
  • First Advance Estimates: January
  • Second Advance Estimates: February
  • Provisional Estimates: May
  • Revised Estimates: Over the next two years
• Nodal Ministry: Ministry of Statistics and Programme Implementation
• Advance Estimates are compiled using:
  • Agricultural production estimates
  • Index of Industrial Production (IIP)
  • Corporate financial results
  • GST collections
  • Government expenditure data
  • Trade statistics
• Significance of Advance Estimates of GDP:
  • Basis for Union Budget Formulation: Provide the official growth projections used in preparing the Union Budget.
  • Fiscal Deficit & Debt Calculations: It is used to compute Fiscal Deficit-to-GDP and Debt-to-GDP ratios.
  • Policy Formulation:  It assists the government and the RBI in assessing economic momentum.
  • Sectoral Performance Assessment: It Provides early insight into agriculture, industry, and services growth trends.

Check Out UPSC CSE Books

Visit PW Store

Difference between First Advance Estimates and Second Advance Estimates

DOWNLOAD PDF