Near-term Indian consumption outlook seems increasingly positive: Govt

The ministry's Monthly Economic Review for October said retail inflation has reached an all-time low in the current series, dropping to 0.25 per cent in October 2025 from 1.44 per cent in September, and this can be largely attributed to the complete impact of reduced GST rates, a favourable base effect and significant falls in food inflation.

"The rationalisation of GST rates has provided a measurable boost to consumption, as reflected in the strengthening of high-frequency indicators, including higher e-way bill generation, record festive-season automobile sales, robust UPI transaction values, and a notable rise in tractor sales," the document said.

These developments point to broad-based improvements in demand conditions across both urban and rural segments, it noted.

"The full impact of GST rationalisation on spending behaviour would become more evident over the next two quarters," it said.

The external environment is characterised by high trade policy uncertainty, though global pressures have moderated relative to earlier peaks.

Overall, the economy enters the second half of FY26 on a stable footing, anchored by well-contained inflation, resilient domestic demand and supportive policy dynamics, even as global uncertainties warrant continued vigilance, it added.

ALCHEMPro News Desk (DS)