Is India growing faster than official numbers suggest? SBI Research sees upside once base revision kicks in

India’s economy may be growing slightly faster than official estimates suggest, according to SBI Research.

It expects GDP growth in FY26 to be around 7.5%, with an upward bias, noting that the second advance estimates scheduled for February 27, 2026, along with the base revision to 2022-23, could lead to changes in the headline numbers.

According to the first advance estimates, GDP growth in FY26 is pegged at 7.4% compared with 6.5% in FY25, while gross value added (GVA) growth is estimated at 7.3%. Nominal GDP growth is seen at 8%, lower than 9.8% in the previous year.

In December, the Reserve Bank of India (RBI), while announcing its monetary policy rate decision, revised its GDP growth projection for 2025-26 to 7.3% from an earlier 6.8%.

“Historically, the difference between RBI’s estimate and NSO’s estimate is always in the range of 20-30 bps and hence the 7.4% estimate of FY26 is quite expected and reasonable,” the report said.

"We, however, believe that GDP growth for FY26 would be around 7.5% with upward bias," SBI Research said.

The second advance estimates, incorporating additional data and revisions, are scheduled to be released on February 27.

“So, all these numbers are expected to change with the base revision to 2022-23,” the report added.

The report noted that stronger government spending and sustained traction in services helped cushion the impact of external headwinds on overall demand.

The fiscal deficit at the end of November 2025 stood at ₹9.8 lakh crore, or 62.3% of the budget estimate. SBI Research said that while tax revenues may fall short of budgeted levels, higher non-tax revenues and lower overall expenditure are likely to keep the fiscal deficit largely in check.

The fiscal deficit for FY26 is projected at ₹15.85 lakh crore, marginally higher than the budgeted ₹15.69 lakh crore, but the deficit as a percentage of GDP is expected to remain unchanged at 4.4% after factoring in the new GDP numbers.

The debt-to-GDP ratio has also been revised down slightly to 56.07%, it added.