How GDP is measured, and what the new base year changes

What is GDP?

Gross domestic product (GDP) is the value of all the goods and services produced in India in a given period. It is the standard measure of the size of the economy, and its growth rate is the most quoted measure of how fast the economy is expanding.

India’s estimates are compiled by the National Statistics Office (NSO), part of the Ministry of Statistics and Programme Implementation (MoSPI). It publishes quarterly figures and annual estimates, each revised as better data comes in.

How is it calculated?

The NSO adds up output sector by sector, then adds taxes on products net of subsidies. The output of each sector, after subtracting the inputs it uses, is called gross value added (GVA). In MoSPI’s tables, GDP equals GVA at basic prices plus net taxes.

The NSO also builds GDP from the spending side: private consumption, government consumption, investment (gross fixed capital formation), and exports minus imports. Both views appear in each release. In April-June 2026, real GVA grew 8.2% and real GDP 7.8%.

How are the quarterly numbers estimated?

By projecting forward from the previous year’s detailed estimates using faster indicators. MoSPI calls this the “Benchmark-Indicator methodology”: estimates for the previous financial year are extrapolated with indicators that are available quickly.

Those indicators include advance estimates of crop production, GST data, railway and port traffic, and bank-wise loan and deposit figures. Because the indicators are partial, the quarterly numbers are revised later. MoSPI’s Q1 release says estimates are “likely to undergo revisions” as data coverage improves and source agencies revise their inputs.

What do the sector figures show?

They show which parts of the economy are driving growth. The NSO groups output into primary, secondary and tertiary (services) sectors, and breaks each down further.

In April-June 2026, services grew 10.0% and the secondary sector 8.6%, while the primary sector grew 2.9%. Financial, real estate, IT and professional services grew fastest, at 12.1%, and mining shrank 2.4%. On the spending side, investment grew 11.9% and private consumption 7.1%. Private consumption is the largest component, at 55.6% of nominal GDP in the quarter.

What is the difference between real and nominal growth?

Nominal GDP is measured at current prices; real GDP strips out price changes. Real growth is the headline figure because it shows the change in the volume of goods and services produced.

In April-June 2026, nominal GDP grew 10.3% to ₹88.27 lakh crore, while real GDP grew 7.8% to ₹81.36 lakh crore. The gap between the two reflects the rise in prices across the economy.

April-June 2026: real and nominal

• ₹81.36 lakh crreal GDP, at 2022-23 prices (growth 7.8%)
• ₹88.27 lakh crnominal GDP, at current prices (growth 10.3%)
• 8.2%real GVA growth

What is a base year?

The base year is the year whose prices are used to value output in every other year. Real GDP for April-June 2026 is expressed at constant 2022-23 prices. The base year also anchors the price indices, weights and data sources behind the estimates.

MoSPI released the new series with base year 2022-23 on 27 February 2026, and provisional estimates for 2025-26 on that basis on 5 June 2026.

What did the new base change?

It brought in new price and production indices and a new way of measuring manufacturing. The series uses a new output Producer Price Index, a new Index of Industrial Production with base 2022-23, and a Banking Services Price Index, along with updated administrative data.

The biggest change in method is “double deflation” for manufacturing. Price changes are removed separately from the value of output and the value of inputs, in place of the single deflation used before. MoSPI notes that with this method the implicit price deflator for manufacturing “may decline, or even show a negative growth rate”.

Did the revision change past growth?

Yes, slightly upward. According to PIB, growth for each of the last three years was revised up by 0.1 percentage point under the new series.

7.3%

7.2%

7.8%

2023-24 (7.2)2024-25 (7.1)2025-26 (7.7)

Real GDP growth on the new 2022-23 series. Annual (%); earlier estimates in brackets

Item	Value
2023-24 (7.2)	7.3%
2024-25 (7.1)	7.2%
2025-26 (7.7)	7.8%

Quarterly figures from April-June 2022 to January-March 2026 were also recalculated and published in MoSPI’s National Accounts Statistics. On the new basis, growth in April-June 2025 was 6.9%.

The next estimate, for July-September 2026, is scheduled for 30 November 2026. As of October 2026, the RBI projects real GDP growth of 7.2% for that quarter and 7.1% for 2026-27 as a whole.