CHENNAI: The Ministry of Finance has affirmed that India’s economy is currently steady and resilient, capable of navigating global headwinds with measured confidence. In its October monthly economic review, the Ministry underscored that domestic conditions remain stable, even as the world faces persistent uncertainties arising from geopolitical tensions, shifting trade policies, and volatile financial markets. The tone of the review reflects cautious optimism rather than exuberance, indicating that the economy has built enough momentum to sustain growth through the rest of the fiscal year without major disruption.
A sharp moderation in inflation emerged as a key highlight. Retail inflation, which had already been low, softened further in October, dropping significantly from the previous month. This decline was driven by rationalisation in GST rates, a favourable statistical base, and easing pressure on food prices. Lower inflation has effectively raised household purchasing power, strengthening consumption sentiment and reviving discretionary spending.
Evidence of this consumption momentum is visible across multiple sectors. The festive season witnessed strong automobile sales, higher digital payment activity, and a surge in goods movement across states, as reflected in rising e-way bill generation. Increased tractor sales pointed to improving rural demand, while consistent urban consumption signalled that household spending is becoming a reliable anchor for growth again.
Public investment continues to play a critical stabilising role. The government’s sustained focus on infrastructure spending and capital expenditure has provided a counterbalance to weaker external demand, ensuring that domestic economic engines keep running. Corporate India, too, appears financially healthy, with companies maintaining stable balance sheets and showing early signs of earnings recovery after a relatively muted period.
On the growth front, early estimates suggest that GDP expansion in the second quarter of fiscal 2025-26 is tracking in a solid range, reinforcing the view that economic activity remains intact. While merchandise exports may experience intermittent pressure due to global volatility, services exports are gaining strength and helping cushion the external sector. October already clocked a record-high performance in services exports, offering reassurance that India’s outward-facing industries retain international competitiveness.
Despite these strengths, the Ministry signalled the need for watchfulness. Global uncertainties are not expected to disappear soon, and could influence exports, foreign capital flows, and business sentiment periodically. The economy, while stable today, will require prudent financial management and agile policy support to maintain this balance through unpredictable global shifts.
In essence, India’s economy is displaying a rare mix of stability, demand revival, and investment support. Inflation is benign, consumption is improving, public spending is robust, corporations are financially sound, and services trade is delivering record numbers. The message is clear: the footing is firm, but the path ahead demands continued discipline, timely policy response, and a close eye on global developments to ensure this stability translates into enduring growth.