The central government will release GDP figures for the January-March quarter of FY26, as well as growth figures for the full year, at 4:00 pm (IST) on Friday. GDP figures for the entire year will be released with the new base year 2022-23. Economists are estimating full year (FY26) growth to be 7.4%, which is 20 basis points less than the Second Advance Estimates (SAE).
RBI has estimated GDP growth at 6.9% for FY27, but high crude oil prices and possible El Nino conditions could become a big risk to this estimate. According to the report, RBI may change its growth and inflation estimates for FY27 in the June policy meeting.
Gross Domestic Product (GDP)
GDP shows the total value of all final goods and services produced within the country during a given period of time. This indicates the aggregate demand in the economy. GDP shows whether the economy is growing or slowing down. It is an important indicator for the fiscal policy of the government, monetary policy of RBI, corporate investment and stock market. GDP is measured in both real and nominal terms. Real GDP does not include the effect of inflation, whereas nominal GDP does include inflation. Nominal GDP plays an important role in deciding the government’s budget and fiscal deficit target.
Gross Value Added (GVA)
GVA measures the total value of goods and services produced by a sector, industry or producer. In this, input costs like raw materials, electricity and other services used for production are reduced. This shows how much new value has actually been added at each stage, so that the same item is not counted twice. GVA is calculated by adding subsidies and subtracting taxes from GDP. GVA growth in FY26 is expected to be 7.7%, which is higher than 7.3% in FY25.
Private Final Consumption Expenditure (PFCE)
PFCE reflects the total expenditure by households on final goods and services. This is the largest part of India’s GDP and its contribution is about 55-56%. This includes everything like daily ration, clothes, rent, haircut, movie tickets. This is a scale to measure the pace of consumption in the economy. According to SAE, PFCE growth is estimated at 8.9% in FY26, which is lower than 9.7% in FY25.
Government Final Consumption Expenditure (GFCE)
GFCE measures the expenditure incurred by the central, state and local governments to provide public goods and services to the public. This includes both revenue and capital expenditure. Its contribution to GDP is about 10-11%. GFCE growth is expected to be 9.6% in FY26, down from 10.5% in FY25.
Gross Fixed Capital Formation (GFCF)
GFCF shows the total investment in fixed assets within the economy over a given period. This includes investment by companies in new machinery, factories, technology, software, as well as spending by the government on infrastructure projects such as roads, railways and airports. This also includes buying new houses by families. The share of GFCF in GDP is about 32% and it is considered the most important measure of investment in the economy. According to SAE, GFCF growth is likely to be 7.1% in FY26, which is higher than 6.4% in FY25.
Net Exports
Net exports i.e. the amount left after deducting imports from exports. This is an important part of the GDP calculation, which ensures that only the production done within the country is counted. When a foreign customer buys goods made in India, that expenditure is not included in PFCE. Therefore, exports are added to GDP so that the full value of Indian products sold abroad can be included. At the same time, the purchase of imported goods is recorded in PFCE. But because it was produced abroad, it did not generate any economic activity in India. For this reason, imports are subtracted from the calculation of GDP, so that the figures show the real picture and do not appear artificially inflated.
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