Services-sector growth slowed as weaker demand, competition and postponed orders moderated business activity, while employment improved modestly. Services-sector growth slowed as domestic and export orders moderated amid weaker demand, competitive pressures, softer market conditions and postponed orders. Output continued to expand, but at its weakest pace in more than four years. Employment growth improved modestly, while input costs rose and firms increased selling prices. Business confidence remained positive but declined, and the composite output indicator weakened due principally to the sharp slowdown in services activity.
Interim bail conditions require residence outside the state and trial attendance in alleged manpower commission corruption proceedings. Interim bail was granted to Anwar Dhebar in a matter involving alleged corruption and an illegal commission mechanism linked to a state marketing corporation. Conditions require him to remain outside Chhattisgarh, attend the trial court, and provide his residential address. The allegations concern manpower supply agencies allegedly being compelled to pay commissions for clearance of legitimate bills, with proceeds routed through intermediaries. The case was registered under the Indian Penal Code and the Prevention of Corruption Act.
Tax certainty measures revise fund-management safe harbours, electronic-payment charges, sectoral exemptions, business-trust treatment, and excess expenditure appropriation. The Taxation and Other Laws (Amendment) Bill, 2026 proposes to replace the Income-tax (Amendment) Ordinance, 2026 and amend payment-system and tax laws. It would prohibit charges on notified electronic payments, revise safe-harbour conditions for eligible investment funds and fund managers, and expand tax exemptions for Government securities, qualifying rough-diamond sales and bonded-warehouse component storage. It also modifies exemptions concerning electronic-goods contract manufacturing, data centres and business-trust dividends, while imposing a differentiated surcharge on qualifying special purpose vehicles. A separately included appropriation bill authorises excess expenditure from the Consolidated Fund of India.
Growth and inflation projections reflect resilient domestic activity while energy volatility, supply disruptions, and food prices sustain inflation risks. Monetary policy projections for fiscal 2026-27 revise real GDP growth upward to 6.7 per cent and Consumer Price Index inflation downward to 5 per cent. Domestic activity is described as resilient amid global uncertainty, but inflationary risks persist from rainfall disruption, energy-price volatility, supply-chain uncertainty, and second-round effects of higher food, fuel and input costs. Core inflation is projected at 4.3 per cent for the fiscal year.
Industry collaboration strengthens MSME competitiveness through shared resources, market linkages, capability building and inclusive support for women entrepreneurs. MSME development is linked to collaboration, knowledge-sharing, institutional support and capability building. Industry associations can provide networking, policy advocacy, business intelligence, skills programmes, shared infrastructure and market linkages, while collective procurement, shared logistics, digital commerce and export readiness may improve competitiveness. Women-led enterprises benefit from market-oriented capability development, mentorship, continuous learning, professional networks, capacity-building programmes and institutional support. The Development of Industry Associations initiative is intended to connect associations and facilitate the sharing of best practices.
Monetary policy rate maintenance continues under a neutral stance amid energy disruption, inflation concerns and sustained currency depreciation. Monetary policy rate maintenance was continued with the repo rate retained at 5.25 per cent under a neutral stance amid uncertainty over energy prices and supply disruptions associated with the West Asia crisis. The growth forecast was marginally increased and the inflation projection reduced. Sustained rupee depreciation against the dollar was attributed to costly oil, capital outflows, widening trade deficits and a strong US dollar.
Monetary policy rate pause maintains a neutral stance amid energy disruption, inflation concerns and sustained rupee depreciation pressures. Monetary policy rates were retained without change for a third consecutive review, with a neutral stance maintained amid uncertainty over energy prices and supply disruptions associated with the West Asia crisis. The policy assessment noted retail inflation above the medium-term target, alongside an upward revision to growth expectations and a downward revision to the inflation projection. Continued rupee depreciation was linked to higher oil prices, capital outflows, widening trade deficits and a stronger US dollar.
Foreign exchange market movement strengthens as lower crude prices and monetary policy signals influence the rupee's direction. Foreign exchange market movement saw the rupee appreciate against the US dollar in early trading, supported by lower crude oil prices, a softer dollar index, domestic equity gains and net foreign institutional investment. Market attention centred on the Reserve Bank of India's monetary policy decision, with expectations of an unchanged benchmark repo rate. Policy communication on inflation and developments in Hormuz-related talks were identified as factors that could influence the rupee's direction.
Dearness allowance arrears must be cleared promptly, while the government examines legal remedies and continues its structured liquidation plan. Pending dearness allowance arrears of government employees and pensioners are to be cleared within a fortnight, with restraint on unproductive expenditure until admissible dues are paid. The government states that it will pay constitutionally and legally valid dues while examining the judgment, precedents and possible legal remedies. It attributes the arrears to delayed pay commission implementation and frozen dearness allowance, and states that a structured liquidation plan has been prepared and partly implemented.
Money-laundering investigation examines alleged fraudulent industrial plot allotments, benami holdings and diversion of plots to residential use. A money-laundering investigation under the Prevention of Money Laundering Act examines alleged irregularities in industrial-plot allotments involving corporation officials, private persons, property dealers and alleged benamidars. The inquiry concerns alleged use of fictitious firms and false addresses to obtain plots, allotments to relatives and associates, and alleged diversion or change of land use from industrial to residential purposes. These activities are alleged to have generated private gains while causing loss to the public exchequer.
Rupee exchange-rate movement gains support from capital inflows, while oil prices, dollar strength and monetary policy shape sentiment. Rupee exchange-rate movement was supported by foreign capital inflows and improved global risk sentiment, while elevated crude-oil prices and a stronger US dollar constrained gains. Market attention shifted to monetary policy, overseas dollar-deposit incentives and easier foreign access to government bonds, which were reported to support capital inflows and India's external position. A cautious approach to the benchmark repo rate was expected amid assessment of the West Asia conflict.
Interim bilateral trade agreement negotiations continue as both sides work to finalise unresolved issues in the proposed arrangement. Interim bilateral trade agreement negotiations between India and the United States are continuing. Both sides have undertaken substantial work, while certain issues remain to be finalised before completion of the proposed interim trade arrangement. A United States Trade Representative delegation visited India to advance discussions. The text records the status of negotiations and identifies no concluded agreement or operative customs measure.
Fuel-price volatility mitigation will combine fiscal measures, consumer protection, energy security and fiscal sustainability during external energy shocks. Fuel-price volatility is to be mitigated through fiscal and administrative measures that protect consumers while maintaining fiscal sustainability. The approach includes monitoring revenue and expenditure, reprioritising spending, and using fiscal measures when economic conditions require. Reduced central excise duty on petrol and diesel moderated the impact of elevated international crude prices and partly offset under-recoveries of public-sector oil marketing companies. Longer-term measures include revenue mobilisation, import diversification, Strategic Petroleum Reserves, cleaner fuels and energy efficiency.
Tax policy certainty reforms propose easier fund management, data-centre access, electronics incentives and revised electronic-payment charging rules. The proposed Bill seeks to simplify conditions for foreign investment funds using fund managers in India without being treated as carrying on business in India, while retaining safeguards against misuse and round-tripping. It proposes removal of approval requirements for foreign cloud companies using Indian data centres and permits leased operation of Indian data centres. It also extends tax support for foreign companies participating in electronics contract manufacturing and component warehousing, preserves tax-free dividends for REIT and InvIT investors in specified circumstances, and removes the prohibition on Merchant Discount Rate charges for notified electronic payment modes.
Responsible precious-metals recycling supports recycled-gold products, organised buyback channels and a more self-reliant domestic supply chain. Responsible precious-metals recycling is promoted through a commemorative recycled-gold coin intended to support domestic recycling, responsible sourcing and a self-reliant supply chain. The product is described as having certified purity authentication, tamper-proof packaging, a unique identification number and an assayer-certified minted card. The initiative seeks to reduce dependence on imported gold and expand organised, transparent recycling infrastructure. An organised silver buyback programme is also described as supporting secure consumer sales and a circular economy for precious metals.
Broad-based growth strategy links tax reforms, trade resilience, industrial support and services development to medium-term economic expansion. The growth strategy combines agricultural productivity, manufacturing, MSME support, infrastructure, logistics, ease of doing business, streamlined income-tax and GST reforms, innovation, digitalisation, human-capital development, energy security, public capital expenditure, foreign direct investment liberalisation, export promotion, fiscal prudence and price stability. Trade resilience is to be strengthened through expanded trade agreements, while manufacturing, services, agriculture and strategic sectors receive targeted policy support. The material also reports secured-asset enforcement cases and recoveries by banks under the SARFAESI framework during FY25.
Co-operative bank governance and financial disclosure support digital transformation, risk management, priority-sector lending and sustainable member-focused growth. Co-operative bank governance and financial disclosure were addressed at the annual general meeting, where the member-notice agenda was transacted and audited financial statements were presented. The bank reported growth in business, deposits and advances, together with net profit, asset quality, provisioning coverage and capital adequacy indicators. Its operational priorities include digital transformation, risk management, selective network expansion, customer service and operational discipline. Future priorities include retail and priority-sector lending, MSMEs, affordable housing and institutional deposits.
Foreign-exchange market conditions weakened the rupee as oil prices, domestic equities and dollar strength shaped near-term currency expectations. The rupee weakened against the US dollar amid elevated crude oil prices, weaker domestic equities and a stronger dollar index, while foreign fund inflows moderated the decline. Attention shifted to the central bank's monetary policy meeting, with continuation of the existing benchmark policy rate anticipated. Earlier measures encouraging overseas dollar deposits and facilitating foreign participation in government bonds were reported to support capital inflows and India's external position.
MSME credit expansion combines SIDBI lending initiatives with guaranteed additional working-capital facilities for eligible borrowers. MSME credit access is being expanded through SIDBI's branch network, direct lending, refinance support, co-lending arrangements, affordable credit for informal micro-entrepreneurs, and invoice-based digital credit for micro enterprises. Emergency Credit Line Guarantee Scheme 5.0 enables eligible MSMEs to obtain additional credit linked to peak fund-based working-capital outstanding, with full guarantee coverage for member lending institutions against defaults on the additional facility. The scheme also covers scheduled passenger airlines under distinct eligibility and guarantee parameters.
The External Commercial Borrowing (ECB) policy has been reviewed to keep it in tune with the evolving macroeconomic situation, changing market conditions, sectoral requirements, the external sector and lessons of experience.Consequent upon such a review, it has been decided to modify some aspects of the ECB policy as indicated below:
All-in-cost ceilings on ECB
As per extant ECB policy, the all-in-cost ceilings for ECBs, in respect of both automatic as well as approval routes, for average maturity period of 3-5 years and more than years are 6 month Libor+300 bps and 6 month Libor+500 bps respectively.
Keeping in view the credit conditions in the international and domestic financial markets, it has been decided to dispense with the requirement of all-in-cost ceilings on ECB until June 30, 2009. Eligible borrowers proposing to avail of ECB beyond the permissible all-in-cost ceilings specified in para 2 above may approach the Reserve Bank of India under the approval route. This relaxation in all-in-cost ceiling will be reviewed in June 2009.
ECBs for development of integrated township
In May 2007, RBI had withdrawn the exemption accorded to the 'development of integrated township' as a permissible end-use of ECB. It has now been decided to permit corporates engaged in the development of integrated township, as defined in Press Note 3 (2002 Series) dated January 04, 2002 issued by the Ministry of Commerce & Industry, to avail of ECB under the Approval Route. This facility will be reviewed in June 2009.
ECBs for NBFCs exclusively engaged in financing of the infrastructure sector
As per the extant policy guidelines on ECB, NBFCs are permitted to avail of ECB for a minimum maturity period of five years to finance import of infrastructure equipments for leasing to infrastructure projects in India. It has now been decided to allow NBFCs, which are exclusively involved in financing of the infrastructure sector, to avail of ECBs from multilateral/regional financial institutions and government owned development financial institutions under the approval route. While considering the applications, RBI will take into account the aggregate commitment of these lenders directly to infrastructure projects in India. The direct lending portfolio of the above lenders vis-à-vis their total ECB lending to NBFCs, at any point of time should not be less than 3:1. This facility will be reviewed in June 2009.
ECBs by the services sector
At present entities in the services sector namely Hotels, Hospitals and Software sector are allowed to avail of ECB up to USD 100 million per financial year for import of capital goods under the approval route. It has now been decided to permit the corporates in the Hotels, Hospitals and Software sectors to avail ECB up to USD 100 million per year for both foreign currency and / or Rupee capital expenditure for permissible end use, other than for land acquisition, under the Automatic Route.
Limit for FIIs' investment in corporate debt
Currently, FIIs have been permitted to invest up to USD 6 billion in corporate debt. It has now been decided to enhance the limit to USD 15 billion.
. All other aspects of ECB policy such as USD 500 million limit per company per year under the Automatic Route, eligible borrower, recognised lender, end-use, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.
. The above amendments in ECB policy will come into force on the date of Notification of Regulations / directions issued by the Reserve Bank in this regard under the Foreign Exchange Management Act, 1999.
ECB policy liberalisation suspends all-in-cost ceilings temporarily and widens eligible borrowers and routes for external borrowing.
The ECB policy review dispenses with the requirement of all-in-cost ceilings until review and allows borrowers exceeding prior ceilings to seek approval from the Reserve Bank; concurrently, it permits integrated township developers and specified NBFCs to access ECBs under the approval route (with a direct-lending ratio condition), moves certain services sector capital expenditure ECBs to the automatic route (excluding land acquisition), and raises the FII corporate debt investment ceiling, with changes effective on RBI notification.
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