CEA: India should see 7.3% growth in Jan-March quarter
TL;DR
India's economy is forecast to grow 7.3% in Q4 FY26, per the CEA, aligning with RBI's revised projection. This growth estimate follows a methodological overhaul updating the GDP base year to 2022-23, which may boost figures by better reflecting digital and gig economy shifts.
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CEA: India should see 7.3% growth in Jan-March quarter
India’s Q4 FY26 GDP Growth Expected at 7.3% Amid Methodological Overhaul
India’s economy is projected to grow 7.3% in the January–March 2026 quarter, according to the Chief Economic Advisor (CEA), reflecting resilience amid structural reforms and evolving economic dynamics. This forecast aligns with the Reserve Bank of India's (RBI) recent upward revision of its FY26 GDP growth projection to 7.3% from 6.8%, underscoring confidence in sustained momentum.
The growth estimate comes as the government releases GDP data under a revised base year of 2022–23, replacing the 2011–12 series. This overhaul adjusts sectoral weights to better capture structural shifts, including the rise of the digital economy and gig work, while reducing the emphasis on agriculture and informal manufacturing. The new methodology also incorporates "double deflation", which separately adjusts input and output prices to improve accuracy, particularly in manufacturing.
Economists highlight that the revised framework could elevate headline growth figures. For instance, Bloomberg surveys suggest a median estimate of 7.6% for FY26 under the new base year, surpassing the government's earlier projection of 7.4%. This aligns with historical precedents, such as the 2015 base revision, which boosted India's GDP by $120 billion and raised growth estimates for 2013–14 from 4.7% to 6.9%.
Sectoral performance remains mixed. Manufacturing, contributing 17% of GDP, is expected to expand robustly, supported by infrastructure spending and tax reforms. Conversely, agricultural growth may moderate to 1.8% in FY26, down from 4% in FY25, potentially affecting rural demand. Urban consumption, however, is gaining traction, with the RBI noting "healthy" rural demand and improving urban activity.
The revised GDP series also has global implications. While India's dollar-based GDP remains constrained by rupee depreciation, the methodological changes could accelerate its path to overtaking Japan as the world's fourth-largest economy.
With the Q4 FY26 data release imminent, policymakers and investors will scrutinize the numbers for insights into India's growth trajectory and policy priorities.
