India on high growth path, GST 2.0 impact favourable: 10 takeaways from Finance Ministry report - Zee Business

Published: 5:14 PM, Nov 27, 2025 | Updated: 5:52 PM, Nov 27, 2025

India’s macroeconomic environment remains stable with growth momentum remaining well supported through the current financial year, on the back of easing inflation, firm domestic demand, GST rationalisation benefits, the Ministry of Finance wrote in its monthly review. The domestic inflation outlook, according to the report, remains encouraging amid softer global commodity prices and supportive domestic policies, though risks from geopolitical tensions, shifting trade dynamics and market volatility need ongoing vigilance. The release of the October Economic Review report comes just ahead of official GDP growth data for the quarter ended September 30, due on Friday, November 28. In the June quarter, the country's GDP expanded 7.8 per cent, beating economist estimates, cementing India's position as the fastest-growing major economy -- outpacing peers amid global headwinds like US tariffs. Here are 10 key takeaways from the October review:

• High-indicators Promising: The country’s macroeconomic picture continues to look steady, with cooling inflation, firm domestic demand, and a policy backdrop that’s still doing the heavy lifting. Early signs of GST 2.0 cuts are beginning to show up in consumption trends, while a solid agriculture season is improving food supply lines and putting more money in rural hands.
• Bountiful Farming: A strong start to rabi sowing and comfortable reservoirs have added a layer of confidence to the farming outlook. Wheat and gram sowing has expanded 19.9 per cent and 8.9 per cent, respectively, thanks to adequate moisture and reservoir levels. Kharif season is proceeding smoothly, with 170.9 lakh metric tonnes procured, as of November 20.
• Demand: Petrol and diesel consumption is recorded at five- and four-month highs owing to festive season travel. "Trade indicators pointed to continued resilience. Port cargo activity, which continued to show growth momentum in October 2025, expanded by double digits, indicating robust trade activity," noted the report.

GST 2.0 boosts consumption amid cooling inflation

• GST 2.0 Impact: High-frequency consumption indicators for October are reflecting nascent signs of the beneficial impact of GST rationalisation, reinforcing its supportive role in sustaining economic activity. Automobile retail sales, as reported by the Federation of Automobile Dealers Associations, grew by 40.5 per cent YoY in October 2025, with both passenger vehicles and two-wheelers recording lifetime highs.
• Earnings Growth: Overall, corporate balance sheets remain resilient and supported by stable earnings. Net sales of a majority of companies that have reported their Q2 results grew 6.1 per cent, with a notable pickup in non-finance firm sales owing to a low-inflation environment. "Profitability remained healthy, with aggregate net profits rising by 12.3 per cent, supported by a rebound in financial companies and stable performance among non-financial firms. Profit margins have continued to strengthen, with PAT as a share of total income reaching an estimated 11.1 per cent -- among the highest in recent years," said the report, citing CMIE data.
• Dalal Street: Steady institutional participation is giving domestic financial markets the liquidity and depth they need. The markets strengthened in October, aided by improving risk sentiment and resilient macroeconomic fundamentals, while bank credit growth showed early signs of reacceleration led by personal loans and continued momentum in MSME lending.
• US Tariffs and the Globe: There are elevated levels of trade policy uncertainty in the external environment, though global pressures have moderated relative to earlier peaks. India’s merchandise exports softened in October due to a surge in gold and silver imports, while service exports hit a record level, providing a significant buffer in the trade deficit. The country's forex reserves, at $687 billion, continued to provide a substantial buffer against external shocks.
• Inflation: Consumer inflation hit a record low of 0.25 per cent in October 2025, reflecting the full impact of GST 2.0 cuts, a favourable base and broad disinflationary forces. Given this trend, the MPC has lowered its FY26 inflation forecast to 2.6 per cent, signalling confidence that price stability will sustain.
• Food Prices: The prices of select agri-commodities have fallen by a steep 5 per cent -- the sharpest fall in more than a decade. This correction is led by vegetables, particularly tomatoes, onions, potatoes and pulses. Even as food prices softened, core inflation remained steady at 4.3 per cent.
• Key Risks:
  • Global trade policy uncertainty
  • Geopolitical frictions
  • Financial market volatility
  • Merchandise export softening
  • Uneven capital flows
  • Supply-side disruptions