New GDP series: Eye on revised mfg maths amid capex push, says India Inc

Clearer view on manufacturing expected with new GDP series

Indian companies may keep a close eye on manufacturing numbers under the new gross domestic product (GDP) series with a revised base year of 2022-23, released on Friday. Previous years have seen differences with manufacturing growth reported in corporate results lagging expansion in manufacturing recorded under the previous GDP series (2011-12 base year). For listed manufacturing firms, growth lagged in seven of the previous 10 years. 

 

The divergence in company results and manufacturing growth recorded in the country has been large at times. For example, the rate of growth in manufacturing gross value added (GVA) at current basic prices year-on-year for 2014-15 was 9.62 per cent. Listed manufacturing companies had seen -1.89 per cent in the same year. Current prices are used because they are not inflation-adjusted and are comparable to figures for company sales, which are also reported without inflation adjustment. 

 

Manufacturing GVA was up 10.94 per cent in 2023-24, while listed companies saw sales growth of 0.63 per cent. Differences in methodology may have contributed, and the latest GDP series brings in additional data sources and methodological changes for greater accuracy for calculating real growth (after adjusting for inflation).  The latest numbers, released on Friday, show that the average share of manufacturing in GDP at current prices between FY23 and FY26 has increased to 13.3 per cent under the new series compared to 12.9 per cent earlier.             

 

Manufacturing GVA growth has seen some changes in the latest series compared to the old. Quarterly manufacturing growth numbers are lower for the first quarter of FY26 (10.07 per cent under the new series compared to 10.13 per cent under the old) and higher for the second quarter (13.11 per cent vs 11.68 per cent).Manufacturing growth in the third quarter came in even higher, at 13.25 per cent under the new series. This gains importance in the light of a record announcement of new manufacturing projects by Indian entities. Announcements were at ₹17.94 trillion for FY25, the highest in the Centre for Monitoring Indian Economy data for more than 30 years. Quarterly numbers since then suggest figures have moved higher. New project announcements worth ₹22.5 trillion were recorded on a rolling four-quarter basis as of December 2025. 

 

“While it was being expected that manufacturing could have a slightly lower bias due to double deflation, the new series numbers reflect that perhaps both organised and unorganised segments have done better,” said Sachchidanand Shukla, group chief economist, Larsen & Toubro. 

 

He pointed out that the economy had undergone technological and legislative changes since the last time the government changed the way it calculated GDP and value added more than a decade ago. This is likely to have resulted in significant structure changes in the economy. 

 

Electronic payments have taken off with UPI (Unified Payments Interface) and technology-enabled direct benefit transfers have resulted in money going directly to beneficiaries’ bank accounts, reducing leakages. Legislative changes include the Insolvency and Bankruptcy Code (IBC), the Real Estate Regulatory Authority (Rera) in various states, and goods and services tax (GST). These have brought in greater formalisation in the economy. Increased formalisation brought about by these technological and legislative changes is likely to have a greater impact on manufacturing estimates.

 

Other parts of the economy are also expected to benefit from improved estimates.

 

“They’re going to be capturing services much better,” said Madhavi Arora, chief economist, Emkay Global. The use of GST and other data sources is expected to quantify services better, she said.

 

Companies catering to specific niches in the economy may keep an eye on any changes that may affect projections, according to Shukla. 

 

“If any niche addressable market size turns out to be smaller or larger due to underlying changes in the economy for example, companies may want to recalibrate their strategy,” he said. 

 

It will likely take a few more quarters to fully reconcile and absorb the changing dynamics of the new series and corporate actions may accordingly play out over the medium term, rather than immediately, according to Shukla.

 

Cement, power, construction and infrastructure, mining and metals, and automobiles are among the sectors that have invested heavily this financial year, Business Standard had reported earlier. Key companies with large investments include Grasim Industries, Adani Enterprises, NTPC, Tata Steel, and Power Grid Corporation.

 

The government has sought to boost manufacturing through the production-linked-incentive scheme.