India's economy grew at the rate of 7.8% in the October-December quarter of the financial year 2025-26, pitting the country as the fastest growing major economy in the world.
Share
India's economy grew at the rate of 7.8% in the October-December quarter of the financial year 2025-26. This figure is much better than expected and India still remains the fastest growing major economy in the world. This information has been given in the new GDP series data of the government. It is proof that the Indian economy is capable of withstanding and recovering from external shocks (like Trump's tariffs). The new GDP series has not only increased the credibility of the data, but also established India as the most attractive destination for global investment.
The most important thing about this date released on Friday (February 27, 2026) is that the government has changed the method of measuring GDP (GDP New Series), which will now reveal a more accurate picture of the country's economic progress.
Steady pace on quarterly basis
Quarterly data shows that the economy maintained a steady pace throughout the financial year. The economy grew at 7.6 percent in the third quarter (Q3), compared to 8.1 percent in the second quarter (Q2) and 7.9 percent in the first quarter (Q1). The figures for the first half have also been revised. Now, the growth rate of Q1 is estimated at 7.9 percent and that of Q2 is 8.1 percent, whereas it was 7.8 percent and 8.2 percent respectively earlier.
In the GDP data released with the new base year of national income (2022-23), the growth rate for the current financial year is estimated at 7.6%, which is higher than the earlier 7.4% (First Advance Estimate) and 7.1% last year.
The main engine of growth this year has been private consumption, whereas in the previous series, fixed investment was said to be the lead driver. The growth rate for the last financial year has also been revised upward from 6.5%. Real GDP growth for 2024-26 is estimated at 7.3%, which is lower than 7.7% in the old series.
Manufacturing growth increased from 8% to 11.2%, while agriculture and services sectors experienced downward revisions. Nominal GDP in the current year is estimated at INR 345 lakh crore, which is less than INR 357 lakh crore in the old series. India's economy in dollars is just below $4 trillion.
Its impact on the common man's pocket
• When GDP grows at the rate of 7.8%, it directly impacts different aspects of your life:
• New employment opportunities: More than 7% growth in manufacturing and service sectors indicates that companies are expanding. When production increases, new jobs are needed. This is a positive sign especially for the youth.
• Salary and bonus expectations: Strong GDP growth means corporate India's profits are improving. Better economic data will support corporate earnings, the benefit of which may be passed on to employees in the form of increments in the times to come.
• Controlling inflation: 'Double deflation' and accurate data calculations will help the government to understand inflation and make better policies to control it. This can reduce the pressure on your savings.
• Good news for investors: These GDP figures have increased the confidence of investors towards the stock market and debt market. The chances of better performance of mutual funds and stocks have increased.
Journey to become the third largest power in the world
According to the International Monetary Fund (IMF), India is soon on its way to becoming the world's third largest economy, leaving behind Japan and Germany. According to an estimation, India will become a $4 trillion economy by the next financial year 2026-27.
Challenge in terms of capita income
However, even though India's overall economy is growing rapidly, but in terms of per capita income, we are still far behind countries like America, Germany and Japan. The real challenge is to extend the benefits of this development to the lowest rungs of the society.
Prof. Mithilesh Kumatr Sinha
Retired Professor of Economics
Nagaland University, Lumami