The Reserve bank of India (RBI) in its ‘State of the Economy’ report has cautioned that India’s economy showed signs of a further pick up in momentum despite continuing global headwinds. The Central bank stated
that a robust expansion in both manufacturing and services activities in October, supported by ‘festive season demand and the ongoing positive impact of the GST reforms’.
RBI added that the inflation has moderated to a historic low and remained well below the target rate.
“Financial conditions remained benign, and the flow of financial resources to the commercial sector increased significantly from a year ago,” RBI added in the State of the Economy, released on November 24.
Goods and Services Tax (GST) reforms became effective, September 22, marking a historical shift in the country’s indirect taxation by merging four slabs into two (5% and 18%) and a special tax slab of 40% for “sin goods”.
The GST council, led by Finance Minister Nirmala Sitharaman, early in September announced a major overhaul in the indirect taxation system, aimed at simplifying the slabs, boosting the consumption and rationalizing the rates.
Private Corporate Biz In Q2
The Reserve Bank released the data on performance of the private corporate business sector during the second quarter of 2025-26.
RBI data highlighted that overall sales of listed private non-financial companies grew 8% y-o-y in Q2 FY26, better than 5.5% in Q1.
Manufacturing firms saw sales rise 8.5%, supported by automobiles, food products, electrical machinery, and chemicals.
IT sector sales grew 7.8%, up from 6%. Non-IT services saw strong 10.6% growth, driven by wholesale and retail trade.
Manufacturing companies’ ICR dipped to 8.6, showing reduced cushion to service debt.
