economy of India It remains stable and growth is now broader, top economists said on Saturday. At the same time, it was also debated whether some incentives might be needed to increase deposits in banks, which after all financed the economy, be it for large infrastructure projects or loans to small businesses.

“In the last three years, the average growth rate is 7.3 percent. This is really remarkable. Also, contrary to popular perception, this growth is driven by improved manufacturing,” noted Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India.

The government this week introduced a new GDP series with 2022-23 as the base year, replacing the previous base year 2011-12.

According to the new series, India’s GDP growth in the October-December quarter has been estimated at 7.8 percent. Growth for the financial year 2025-2026 has been estimated at 7.6% according to the second advanced estimates.

Economist Ashima Goyal, former member of the Reserve Bank of India’s monetary policy committee (MPC), says the new GDP shows the diversity of the economy.

“It shows that manufacturing has done well, investment has done well, farmers’ incomes have gone up,” Goyal said.

Speaking at the BT Banking and Economy Summit at the National Stock Exchange in Mumbai, Goyal stressed that India’s data was credible and that there had been a careful assessment.

In the past, there has been criticism that India’s GDP data does not paint a completely realistic picture. Last year, the International Monetary Fund (IMF) had assigned a ‘C’ grade to India’s national accounts statistics, indicating deficiencies that make monitoring somewhat difficult.

Does the new GDP series address critics’ concerns?

“Improvements are an ongoing process. But that doesn’t mean discrediting a country’s statistical system that has been assiduously populated over the years,” Ghosh said.

In recent times, credit growth has lagged behind deposit growth. As interest rates have come down, many Indians are looking to stock markets and mutual funds for better returns. Madan Sabnavis, Chief Economist at Bank Of Baroda believes that perhaps it is time for bank deposits to get some tax incentives to make them attractive.

Sabnavis pointed out that if one parks money in a bank fixed deposit, he would get a return of 6-7%. A mutual fund could earn a return of 12 percent over the long term. and therefore feels the need to give certain tax incentives to deposits.

“India is still a bank-oriented economy. Banks are financing infrastructure and MSMEs in the priority sector and in each specific sector. We are not at a stage where we can say that the market decides. Today we have this crazy situation. The banks have no funds,” he stressed. He added that the bank conducting open market operations to address liquidity conditions could only be a short-term solution.

Ghosh agreed that depositors should be supported in terms of fair returns.

It was noted that close to 40 percent of fixed deposits were held by senior citizens and lower returns would affect their purchasing power.

Ghosh opined that deposits should be supported, but there could be some policy prescription to allow it to a limited extent.