Although, in early February, the monetary policy, the central bank reduced the 25 basis points repo rate(bps). This was the first reduction in nearly five years to help stimulate a slowing economy.
After doing 11 meetings to keep the repo rate at 6.50% by RBI(Reserve Bank of India) from May 2022 to February 2023, RBI has increased the repo rate by 250.
The report says that growth next year will be stable compared to FY25, even though the government will spend less to reduce the budget deficit from 4.8% to 4.4% of GDP.
Since April 2023, the repo rate has remained at 6.5 percent to control inflation and bring it closer to the medium-term target of 4 percent.
The Crisil report mentioned that the next financial year would be stronger by supporting relaxed monetary policy, and also the government has a goal regarding superior private consumption. There is also a plan regarding an increment in the government capital expenditure by 10.01%.
According to RBI, the crude oil price will be down, and other commodity prices will increase since then, the RBI has been comfortable.
As per money control, the Indian economy recovered in the December quarter to grow at 6.2 percent after sinking to a seven-quarter low of 5.6 percent in the July-September period, as per data released on February 28.
Growth in Q3FY25 quarters came from the major agriculture and services sectors, although the private and government sectors have increased spending, however, capital formation stayed flat at 5.7 percent, compared to 5.8 percent in the previous quarter.
CRISIL report also expects inflation to ease further in FY26.
The report stated, and according to Money Control, that Rabi sowing has made good progress, increasing by 1.5% compared to last year as of February 4. This is a positive sign for food supplies in fiscal 2026.
Note: All the above data is given as per the CRISIL report and the Money Control portal.
