7.4% is the headline. The number the Budget will actually use is 8.0%

On January 7 the National Statistics Office released the first advance estimate of gross domestic product for the financial year ending March 2026. Real growth came in at 7.4%, up from 6.5% in the previous year, and comfortably above the 6.3% to 6.8% range the government had projected in February 2025. The estimate was published at 4pm, and by evening it was being read as vindication of a slowdown year.

What the release actually says

• Real GDP at constant 2011-12 prices: Rs 201.90 lakh crore, against Rs 187.97 lakh crore in FY2024-25.
• Real GVA growth of 7.3%, led by tertiary sectors: financial, real estate and professional services, and public administration together grew 9.9%.
• Trade, hotels, transport and communication grew 7.5%. Manufacturing and construction together grew 7.0%.
• Agriculture and allied sectors grew 3.1%; electricity, gas, water and other utilities grew 2.1%.
• Private final consumption expenditure grew 7.0% and gross fixed capital formation 7.8%, against 7.1% a year earlier.

Why the nominal number matters more

Nominal GDP is estimated to grow 8.0%, to Rs 357.14 lakh crore. That is a five-year low, and the distance between 7.4% and 8.0% is only 60 basis points, the narrowest since 2011-12. The gap reflects a GDP deflator of about 0.5%, close to the floor for the series. In level terms the estimate lands marginally above the Rs 356.97 lakh crore assumed in the Union Budget, which is why the fiscal arithmetic for 2026-27 is not in trouble even as the growth rate is the slowest nominal case since the pandemic year.

There is a deadline attached. MoSPI is in the middle of moving the base year of the national accounts from 2011-12 to 2022-23, and on February 27, 2026 it will publish the second advance estimates for 2025-26 along with three years of quarterly data on the new series. The 7.4% figure is therefore the last prominent print on the old yardstick, and it will not be the number 2026-27 is quoted against.