GST 2.0 bolstered momentum, economy on stable footing: FinMin review
The reduction in the goods and services tax (GST) rates has increased the momentum in India’s economic activity both on the supply and demand sides, while robust agricultural activity — reflected in the strong onset of rabi sowing and adequate reservoir levels — has reinforced the outlook for food supply and rural incomes, the finance ministry said on Thursday.
Noting that the favourable impact of GST rationalisation is increasingly visible in consumption indicators, the ministry’s monthly economic review for October asserted that well-anchored inflation expectations, sustained public capital expenditure and firming rural and urban demand are indicative of a resilient domestic economy and the Indian economy is on a stable footing.
“The inflation outlook remains encouraging, supported by softening global commodity prices, benign energy markets, and targeted domestic supply interventions. However, balance of risks warrants continued vigilance,” stated the review, authored by officials in the economic division of the Department of Economic Affairs.
“Global uncertainties — including shifting trade policies, geopolitical frictions, and financial market volatility — pose potential headwinds to exports, capital flows, and investor sentiment. Notwithstanding these challenges, the confluence of well-anchored inflation expectations, sustained public capital expenditure, and firming rural and urban demand places the economy on a stable footing, positioning it to navigate emerging risks and preserve its growth momentum through the remainder of FY26,” the officials posited.
While trade policy uncertainty remains elevated, the ministry felt that global pressures have moderated relative to earlier peaks. “While a series of trade agreements between the major economies has contributed to a reduction in this uncertainty, it still remains elevated due to the absence of clear, transparent, and sustainable agreements among these partners,” the review stated.
