The Ministry of Statistics and Programme Implementation’s (MoSPI) revamp of the GDP data has thrown up several interesting changes from what we previously thought of the Indian economy, chief among them being that growth in 2023-24 is now not as high as estimated earlier (9.2% in the old series, 7.2% in the new).However, growth is only the year-on-year change in the GDP in rupee terms – so, that is where one must look to understand the consequences of the new GDP series. And the Indian economy is somewhat smaller than what the statistics ministry had previously calculated.The new series with 2022-23 as the base year for prices has led to a reduction in the GDP in nominal terms by 3-4% in 2025-26, as well as in the previous three years. This is because of changes in the sources of data used to compile the GDP, as well as the methods.“Larger impacts normally are seen when there is a substantial change in the databases. As databases keep improving, the changes – whether positive or negative – tend to reduce, which is what you can see over the past few revisions, even in India, that the changes have been in the region of 2-3-4%, less than that,” MoSPI Secretary Saurabh Garg said at a briefing on Friday.Globally, revisions have changed GDPs by a far greater magnitude. Just take the example of Nigeria. In 2024, the African nation’s economy was the 58th largest in the world. But a rebasing exercise in July 2025 – which changed the base year to 2019 from 2010 – led to Nigeria’s nominal GDP in 2024 being re-estimated at $243 billion as it added more than $50 billion, or roughly 30% of its GDP, in 2024.This was not the first time Nigeria had seen such a huge increase in its GDP due to a change in the base year. More than a decade ago, updating the base year from 1990 to 2010 had helped propel Nigeria to the position of Africa’s largest economy, thanks to an even-larger 89% increase in the GDP to $510 billion in 2014. A sharp devaluation in the Nigerian currency, the naira, in 2023 and 2024 – when it weakened by 49% against the US dollar in 2023 and another 41% in 2024 – means the economy actually became significantly smaller in US dollar terms.The experience has been somewhat similar for India.Fiscal consolidationA change in the size of the economy has knock-on effects.Story continues below this adThe Union Budget presented on February 1 said the fiscal deficit target of 4.4% of GDP for 2025-26 was set to be achieved. However, that ratio was calculated on the basis of the first advance estimate of GDP, released in January, which was as per the old series. If one were to use the second advance estimate under the new series released on Friday – which lowered this year’s nominal GDP by 3.3% to Rs 345 lakh crore – the fiscal deficit for 2025-26 edges up to 4.5%. And given that the nominal GDP in absolute terms has reduced for previous years too, fiscal deficits have risen: from 6.5% to 6.7% for 2022-23, 5.5% to 5.7% for 2023-24, and 4.8% to 4.9% for 2024-25.Udit Misra writes | As more Indians move to cities, 16th Finance Commission gives a boost to urban governanceChief Economic Advisor V Anantha Nageswaran took note of the same on Friday, although he said the GDP revisions do not alter the fiscal trajectory the government is on.For 2026-27, the picture is not so simple. The fiscal deficit target has been fixed at 4.3% of GDP, or Rs 16.96 lakh crore in absolute terms. Assuming the fiscal deficit in rupee terms is met, achieving the target in terms of the GDP will require nominal growth next year to be 13-14% – much higher than the Budget’s assumption of 10% – according to calculations by The Indian Express. This, as per SBI Capital Markets, appears difficult even if real growth in 2026-27 is in line with the CEA’s revised growth forecast of 7-7.4%. “Clearly, the government will have to recalibrate its borrowing to achieve fiscal aims,” SBI Capital Markets’ Venkatesh Balakrishnan said in a note on Friday.The same applies for the new fiscal anchor, the debt-to-GDP ratio. Soumya Kanti Ghosh, State Bank of India’s Group Chief Economic Advisor, estimated that the Centre’s debt-to-GDP ratio will rise from 56.2% to 58.1% in 2025-26.Story continues below this adCalculations show nominal growth of 10% in 2026-27 will leave the ratio at 57.5% – well above the target of 55.6% set out by the finance ministry in the Budget.$4 trillion economyWhile the government’s final objective is for India to be developed by 2047, one milestone on that journey is becoming a $4 trillion economy. A reduction in the nominal GDP under the new series does not help.Going by Friday’s closing exchange rate of 90.98 per dollar, India’s GDP in 2025-26 stood at $3.8 trillion. Assuming the same exchange rate for 2026-27 and 10% growth in nominal GDP as assumed in the Budget, the economy will comfortably exceed the $4-trillion mark next year – something Nageswaran mentioned on Friday.Of course, much depends on not just the nominal growth rate but also the rupee’s exchange rate – a weaker rupee makes it more difficult for the GDP to be higher in US dollar terms, just as in the case of Nigeria. And while 2025-26 has seen the Indian currency depreciate rapidly, the next fiscal could perhaps be better should capital inflows continue to improve on the back of trade deals being signed.