India's Statistics Secretary highlighted how RBI's repo rate reductions and GST rate rationalisation have delivered a "favourable effect" on economic growth. These measures boosted consumption via lower inflation (0.25% in Oct 2025), higher disposable incomes, and strong high-frequency indicators like e-way bills and festive sales.
The Finance Ministry's October Monthly Economic Review credits repo rate cuts and GST reforms for measurably enhancing consumption and growth momentum. Retail inflation hit a series low of 0.25% in October—down from 1.44% in September—driven by GST slab consolidation (5% & 18% slabs covering 99% daily items), favourable base effects, and falling food prices.
High-frequency data reflects the impact: surging e-way bills, record festive auto sales, robust UPI volumes, and tractor demand signal broad urban-rural recovery. RBI's liquidity injections via repo easing (now 5.50%) made credit cheaper, spurring investment while GST cuts on 375+ items eased household budgets.
Q2 FY26 GDP estimates range 7-7.5%, with the economy entering H2 on stable footing despite global trade risks. Structural reforms like labour codes further support job creation and resilience.
Key highlights
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GST rationalisation: 99% daily items cheaper; inflation at 0.25% (Oct 2025).
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Repo rate cuts: Boosted liquidity, cheaper credit for growth.
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Demand surge: E-way bills, auto/UPI/tractor sales at peaks.
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Outlook: Q2 GDP 7-7.5%; stable amid external headwinds.
Sources: Finance Ministry Monthly Economic Review (Oct 2025); Business Standard; ET Now; RBI Bulletin; ClearTax.