India’s GST reforms should result in positive impact: RBI Bulletin

The ‘landmark’ goods and services tax (GST) reforms should progressively result in a sustained positive impact through significant gains in ease of doing business, lower retail prices and strengthening of consumption growth drivers, according to an article on the state of the domestic economy in the latest issue of the Reserve Bank of India (RBI) Bulletin.

Though global uncertainty remained elevated in the wake of US trade tariffs and renewed concerns over fiscal health of advanced economies, the Indian economy exhibited marked resilience as evident from the five-quarter high growth during the first quarter (Q1) of fiscal 2025-26, propelled by domestic drivers, the article noted.

GST reforms should progressively result in a sustained positive impact through key gains in ease of doing business, lower retail prices and strengthening of consumption growth drivers, an article in the Reserve Bank of India Bulletin said.
The rising role of NBFCs in credit provision, especially to the industrial and retail sectors, is reflected in their rising credit-to-GDP ratio, another article noted.

Consumer price index (CPI)-based headline inflation edged up but remained well below the target rate for the seventh consecutive month. System liquidity remained in surplus facilitating the pass through of policy rate cuts.

Indian equity markets witnessed bidirectional movements during August-September. India’s current account deficit moderated in Q1 over last year, supported by robust services exports and strong remittances receipts, the article added.

The increasing role of non-banking financial companies (NBFCs) in credit provision, especially to the industrial and retail sectors, is clearly reflected in their rising credit-to-gross domestic product (GDP) ratio, said another article titled ‘Review of Performance of the NBFC Sector’.

At end-December 2024, the financial health of the sector remained strong, as reflected in key indicators such as return on assets, capital to risk-weighted assets, and non-performing assets, it observed.

The empirical analysis shows that there is transmission of monetary policy impulses to NBFCs’ borrowing and lending rates, albeit, incomplete, it added.

Fibre2Fashion News Desk (DS)