Loading...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 News - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ----
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ----
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ----
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Lokta Opens Its Agentic Loan Servicing Platform to NBFCs Up to Rs 100 crore, with No Platform Fee for Up to Two Years
    RTI seeks Aadhaar date-of-birth changes after pre-poll Bihar pension hike; UIDAI says no such data
    IC Electricals Secures Approx. ₹6 Crore Railway Orders and ₹1 Crore Export Order
    Additional Information related to GDP Estimates Received After Release of Q1 Estimates of FY 2026-27
    Union Minister of Commerce & Industry Shri Piyush Goyal Chairs CEO Roundtable on Ease of Doing Business for Scaling India’s Data Centre Ecosystem
    India–Afghanistan Joint Working Group on Trade Holds Virtual Meeting; Reviews Measures to Strengthen Bilateral Trade and Economic Cooperation
    PM Surya Ghar Yojana 2026: How to Get Rs 78,000 Solar Subsidy & Cut Your Electricity Bill
    Japan's JCR upgrades India's sovereign rating to 'A-', cites solid growth, improved financial system
    In personal insolvency case before NCLAT, Subhash Chandra opposes formation of 5-member NCLT bench
    GoCredit Launches Free Loan App Checker to Verify If a Lending App Is Real, Fake or RBI Registered
    Rupee falls 2 paise to 94.97 against US dollar in early trade
    Senior bureaucrats attend IICA’s ‘weekend wisdom’ program initiave
    NLMC to Facilitate E-Auction of 459 RINL Land Parcels in Visakhapatnam
    CCI approves acquisition of Aseem Infrastructure Finance Limited by TPG Nicobar SG Pte. Ltd. and related transactions
    CCI approves acquisition of up to 100% equity shareholding of Apollo Fertility Centre (AFCPL) and Apollo Specialty Hospitals (ASHPL) by Kids Clinic In...
    ED arrests businessman in DMF-linked money laundering case
    Rupee gains 27 paise to close at 94.95 against US dollar
    India's CAD widens to USD 4.2 bn in Q1 amid West Asia conflict: RBI data
    Andhra commercial tax collections rise by 11 per cent in August to Rs 4,983 cr
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
September 2, 2026
Show AI Summary
NBFC loan servicing governance retains lender control through deterministic decision rules, maker-checker controls, reconciled migration and optional AI assistance.
Lokta Next 100 offers RBI-registered NBFCs with loan books up to Rs 100 crore post-approval loan servicing, accounting, reporting, analytics, collections, recovery and partner-management functions, excluding pure-play microfinance NBFCs. Credit, approval and money decisions remain with the lender. Maker-checker approval applies to every change, and migration requires line-by-line reconciliation before cutover. Records remain lender-owned, hosted in India and exportable. AI may propose changes but cannot post to the ledger; deterministic lender-policy rules decide changes. Platform fees are deferred for up to 24 months, subject to stated loan-book thresholds.
September 2, 2026
Show AI Summary
RTI access to maintained records does not require creation of Aadhaar date-of-birth update data on demand.
UIDAI did not maintain separate Aadhaar data on date-of-birth updates in Bihar following the announced social security pension enhancement, including month-wise or district-wise compilations. No internal review or flagging of unusual update patterns was available or applicable in its records. The Central Information Commission clarified that the RTI framework does not require a public authority to create, compile or generate information that it does not maintain in the form requested. The initial CPIO response treating the information as outside the RTI Act was considered inappropriate.
September 2, 2026
Show AI Summary
Transgender arrest and detention safeguards prompt calls for a standard operating procedure and clearer procedural protections.
Legal and regulatory issues include safeguards for arrest and detention of transgender persons, consultation requirements in Bar Council policy-making, and procedural accountability in electoral administration and policing. Personal insolvency proceedings raise questions about tribunal powers to constitute an expanded bench. Hospitality operators are expected to comply strictly with food-safety and hygiene norms. Proposed restrictions on minors' social-media accounts address cyberbullying, online exploitation, and harmful screen exposure.
September 2, 2026
Show AI Summary
Railway equipment purchase orders and export order expand IC Electricals' domestic and international business pipeline.
IC Electricals Company Limited has secured railway purchase orders for electrical and electronic supplies and an export order, creating combined order inflow across domestic railway operations and international markets. Its product portfolio includes regulators, battery chargers, emergency lights, inverters, microprocessor-based control systems, alternators, traction motors, and permanent magnet alternators with controllers. Forward-looking statements on business plans, projects, and research and development remain subject to risks and uncertainties and may differ materially from actual results.
September 2, 2026
Show AI Summary
Double deflation explains negative manufacturing GVA deflators when input prices rise faster than output prices.
Double deflation in manufacturing separately deflates gross output and intermediate consumption, with real GVA derived from their difference. Where input prices rise faster than output prices, nominal GVA may grow more slowly than real GVA, producing a negative implicit GVA deflator despite rising output and input prices. A negative manufacturing GVA deflator therefore does not establish a fall in manufactured-product prices or lower real growth. The implicit GDP deflator is a derived ratio between current-price and constant-price GDP and differs from CPI and WPI because of their distinct coverage, weights, and price concepts.
September 2, 2026
Show AI Summary
Data centre ease-of-doing-business reforms target reliable power, prepared land, streamlined approvals and building standards for faster infrastructure deployment.
Ease-of-doing-business reforms for India's data-centre ecosystem focus on faster and sustainable infrastructure deployment through reliable power, ready-to-use land, streamlined approvals and suitable building regulations. Proposed power measures include cluster-based transmission planning, first-day sanctioned load, dual feeders and cross-border renewable-energy procurement. Data-centre-ready land banks and power-ready parcels are intended to reduce development timelines. The National Building Code 2026 recognises data centres under Group E and contains a dedicated annex on fire-risk assessment and data-centre-specific performance indicators.
September 2, 2026
Show AI Summary
Trade facilitation and customs cooperation drive follow-up action on connectivity, regulatory coordination, investment promotion and bilateral commercial engagement.
India-Afghanistan bilateral trade and economic cooperation is being advanced through institutional engagement on trade facilitation, customs cooperation, connectivity, investment and commercial exchange. Priority areas include customs and data-sharing cooperation, visa facilitation for traders, banking and financial cooperation, pharmaceutical and agricultural trade, energy cooperation, tariff concessions, cargo connectivity and port-related matters. Follow-up action covers regulatory cooperation, improved connectivity, investment promotion and business-to-business engagement.
September 2, 2026
Show AI Summary
Residential rooftop solar subsidy requires eligibility, prior approval, registered installation, net metering, commissioning, and verified bank details for direct transfer.
PM Surya Ghar Muft Bijli Yojana provides central financial assistance for eligible grid-connected residential rooftop solar systems, capped at Rs. 78,000 for systems of three kilowatts or more. Applicants must be Indian citizens who own a suitable house, hold a valid electricity connection, and have not received an earlier solar-panel subsidy. Applications require portal registration, distribution-company feasibility approval, installation through a registered vendor, net metering, inspection, commissioning and submission of bank details. Assistance is transferred directly after verification. State-specific net-metering procedures, approvals and additional incentives may apply.
September 2, 2026
Show AI Summary
Sovereign credit rating upgrade reflects solid growth, stronger financial systems, and improving fiscal and external resilience.
JCR upgrades India's foreign-currency and local-currency long-term issuer ratings to A- with a stable outlook, citing sustained economic growth, productivity-oriented policies and improved financial-system soundness. Fiscal constraints include elevated deficits, intergovernmental fiscal transfers, electoral-cycle sensitivity, and high combined government debt and interest burdens. Greater emphasis on infrastructure capital expenditure has improved the quality of fiscal spending. External resilience is supported by a contained current account deficit, services surplus and foreign-exchange reserves exceeding short-term external debt.
September 2, 2026
Show AI Summary
Personal insolvency bench constitution and repayment-plan eligibility remain contested where a larger tribunal bench stays a third-member order.
Personal insolvency proceedings raised a challenge to the National Company Law Tribunal's authority to constitute a five-member bench after a split verdict. The challenge contended that the mechanism for differing views permits reference to another member or members, but does not authorise a five-member bench. The larger bench stayed the third member's order, restricted asset alienation, and suspended an order permitting settlement of personal-guarantee claims. The dispute concerned the validity of that bench, the split-verdict reference procedure, repayment-plan eligibility, and pending creditor appeals.
September 2, 2026
Show AI Summary
Digital lending app verification enables borrowers to identify regulated lenders, grievance channels, and warning signs before accepting loans.
GoCredit's Loan App Checker allows borrowers to search lending apps against the public Digital Lending App directory and identify the regulated lender, grievance contact and RBI Ombudsman escalation route where a match exists. Regulatory reporting by regulated entities enables app-level verification, while borrowers should also check the lender named in app disclosures and loan agreements. A directory listing is a regulated-entity disclosure, not RBI approval or endorsement. Unmatched apps should be assessed through verification steps and reported through official channels where appropriate.
September 2, 2026
Show AI Summary
Rupee depreciation in early trade reflected oil-price pressures, risk aversion, higher Treasury yields and broad dollar strength.
Early foreign-exchange trading saw the rupee weaken against the US dollar amid renewed US-Iran tensions, risk aversion, higher Brent crude prices, and a stronger dollar. Safe-haven demand, inflation concerns linked to potential oil-supply disruption, expectations of a September Federal Reserve rate increase, and higher US Treasury yields supported the broad dollar rally. RBI monitoring of the rupee's decline was noted.
September 2, 2026
Show AI Summary
Responsible AI governance requires ethical safeguards, privacy protection, accountability and adaptive oversight to build lasting corporate stakeholder trust.
Responsible artificial intelligence governance requires continuous innovation, inclusive development, responsible deployment and trust-based governance. AI systems should be ethical, safe, transparent, fair and human-centric, with safeguards for privacy, bias, security and accountability. Proportionate and adaptive regulation should provide clear accountability, standards, monitoring, auditability and grievance redressal. Good governance, cybersecurity, personal data protection and responsible AI together strengthen organisational resilience, stakeholder trust, transparency and sustainable innovation.
September 2, 2026
Show AI Summary
E-auction of surplus public land enables transparent outright sale of RINL parcels through registered, KYC-verified bidding.
National Land Monetization Corporation will facilitate the e-auction and outright sale of 459 encumbrance-free RINL land parcels, including residential plots and parcels suited for commercial and logistics use. Competitive bidding will occur through the RailTel E-Nivida e-procurement platform. Participation requires online registration, KYC verification, and plot-wise submission of an earnest money deposit within prescribed timelines. The process supports transparent monetisation of surplus land and non-core public assets.
September 2, 2026
Show AI Summary
Competition approval for infrastructure finance restructuring covers acquisition, minority transfer, investment divestment, and merger of regulated NBFCs.
Competition Commission of India approval applies to the acquisition of Aseem Infrastructure Finance Limited by TPG Nicobar SG Pte. Ltd., a subsequent minority share acquisition by ICICI Bank Limited, and Aseem's divestment of its shareholding in NIIF Infrastructure Finance Limited to National Investment and Infrastructure Fund II. Following the acquisition, Climate Finance India Private Limited is intended to merge into Aseem as the surviving entity. The entities involved include RBI-registered non-deposit taking NBFCs operating in infrastructure finance, investment and credit, and infrastructure debt financing.
September 2, 2026
Show AI Summary
Healthcare merger approval enables KCIL to acquire fertility and specialty hospital businesses alongside related equity issuances and investment.
Competition Commission approval covers KCIL's acquisition of up to 100% equity shareholding in AFCPL and 100% equity shareholding in ASHPL. The combination includes KCIL issuing equity shares and optionally convertible debentures to AHLL, representing 9.9% fully diluted shareholding as partial consideration, together with a further KCIL equity investment by Arvon Investments Pte. Ltd. KCIL operates mother and baby care hospitals, while AFCPL provides assisted reproductive treatment and reproductive-medicine services.
September 1, 2026
Show AI Summary
Money-laundering investigation into alleged District Mineral Fund diversion examines purported liaison activity and asset acquisition through proceeds of crime.
Money-laundering proceedings under the Prevention of Money Laundering Act concern alleged diversion of District Mineral Fund resources through the Chhattisgarh Seed Corporation. The investigation alleges siphoning of public funds by contractors in collusion with government officials and political executives. A businessman was identified as an alleged liaisoner and financial coordinator between public servants, district authorities and private vendors. Allegations also include receipt of commissions, acquisition of immovable assets from purported proceeds of crime, non-production of records, and contradictory statements during questioning.
September 1, 2026
Show AI Summary
Foreign exchange market dynamics: rupee appreciation reflected portfolio inflows, domestic growth, and possible central-bank intervention amid external pressures.
The rupee appreciated against the US dollar, supported by domestic growth, controlled fiscal slippage, portfolio-related inflows and possible Reserve Bank of India intervention. Its gains were limited by weak equity markets, rising crude oil prices and a stronger dollar. External geopolitical tensions and hawkish US monetary signals remained potential pressures. Domestic indicators showed strong economic activity, while the current account deficit widened because of a higher merchandise trade deficit. Foreign portfolio inflows continued despite investors remaining net sellers during the year.
September 1, 2026
Show AI Summary
Current account deficit widened as merchandise trade deficit increased, notwithstanding stronger services receipts, remittances, and foreign direct investment inflows.
India's current account deficit widened in the first quarter of 2026-27 as the merchandise trade deficit increased. Higher net services receipts, increased personal transfer receipts and lower net primary-income outgo partly supported the external account. Financial-account movements included higher net foreign direct investment inflows, a shift in foreign portfolio investment from net inflow to net outflow, and lower net inflows through non-resident deposits and external commercial borrowings. Foreign exchange reserves declined on a balance-of-payments basis during the quarter.
September 1, 2026
Show AI Summary
Technology-enabled tax compliance and enforcement supported higher commercial tax collections, while GST rate reductions moderated sectoral net GST growth.
Technology-enabled tax administration supported commercial tax and net GST collection growth in Andhra Pradesh during August 2026 and the cumulative period through August. AI-based analytics and scrutiny, IGST reversals, UPI-based enforcement, registration verification, Aadhaar authentication, digital payment enablement, predictive analytics and data sharing strengthened compliance, scrutiny and revenue mobilisation. Petroleum VAT, professional tax, liquor VAT and IGST settlement also increased, while GST rate reductions moderated net GST performance in specified product sectors.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Showing Results for : Reset Filters

RBI’s Role in India’s Growth and Navigating Global Challenges - Address by Shri Sanjay Malhotra, Governor, Reserve Bank of India, at Princeton University, USA on April 18, 2026

April 21, 2026

Contents
Summary
Note

Note

-

Bookmark

Print

Print

Good Morning.

1. Let me begin by thanking you for giving me this opportunity to share my thoughts with you. It is indeed a pleasure to be present here amongst some of the brightest minds.

2. I fondly remember the 11 months spent here in 2008-09: from the basics of economics with courses by Bob Willig on anti-trust economics (God bless his soul), Angus Deaton, Alan Blinder (who had thought his lessons on monetary policy and communication would be of so much use going forward!) and the Grossmans, to the lively camaraderie of the small and cohesive MPP batch, the family outings to the beautiful country side in Fall and Spring, and the Princeton-Harvard football rivalry, are all vividly etched in memory.

3. You are all aware of the huge growth story of India in the last decade. We have grown, on an average, by 6.1% per year1, whereas the global economy grew by 3.2% and our nearest peers like China grew by 5.6% and Indonesia by 4.2%2. I will not discuss the core drivers of growth – consumption, investment, services, etc. I will talk about the enablers which work in the background creating a facilitating environment for the core factors to play out.

4. I will talk about RBI’s role in providing this facilitative ecosystem. I may mention here that the RBI, unlike many central banks, is a full-fledged, full-service central bank, with multifarious responsibilities ranging from monetary policy, currency management, forex management and regulation and supervision of banks, non-banking financial companies and payments systems. Apart from being the Banker’s bank, it is the banker and debt manager of the central and state governments. Besides, RBI also has a developmental role. I will, however, be touching upon the core functions of the Reserve Bank, which provide the enabling conducive environment for households, businesses and governments.

I. Price Stability

5. First is price stability. It is a goal all central banks follow - not only because inflation is a regressive tax, which hits the poorest hardest, but also because price stability is important for businesses and households to plan and invest confidently. Unlike some countries like the USA which have an explicit dual mandate and others like New Zealand, which have an explicit single mandate, we have price stability as the primary mandate to be pursued, keeping in mind the objective of growth.

6. We formally adopted this mandate in 2016. We have a Flexible Inflation Targeting (FIT) framework. It is flexible because, while we have a point target (4 %), there is a band of 2% on either side. The relatively wide tolerance band around the target allows us to navigate the supply shocks – internal as well as external, given the large weight of food and fuel (supply side factors) in the CPI basket.

7. How do we conduct monetary policy, especially in navigating the global challenges creating high uncertainty like this? I am reminded of what Alan Greenspan once said that uncertainty is not just an important feature of the monetary policy landscape; it is the defining characteristic. In other words, in central banking, the only certainty you have is uncertainty.

8. This is so because even in times of low uncertainty and volatility, the economy and monetary policy transmission are complex and ever-changing. Economists over the years have tried to understand the relationships between various macroeconomic variables and built models. However, every model, no matter how detailed or how well designed conceptually and empirically, is a vastly simplified representation of the world that we experience with all its intricacies on a day-to-day basis. For example, the slope of the Phillips curve or the the natural rate of interest are uncertain. This itself introduces uncertainty in policy making. There is also uncertainty about data. Along with uncertainty, where we are unable to predict the probability of an outcome, we also have unpredictability now, where outcomes cannot even be predicted. This makes monetary policy making even more difficult.

9. Since, uncertainty is central to monetary policy, the broader guiding principles of our policy-making do not change. It is only their application, which changes.

10. The first principle is to prioritise robustness over optimality. It involves risk management. We try to understand the risks arising out of the uncertainties, assess their probabilities, quantify their impact and then devise a policy that maximises best policy outcomes of price stability and growth.

11. Another principle that we keep in mind is the Brainard’s principle of attenuation. If the central bank is unsure of the magnitude of the effect of a change in its instrument, it should change that instrument less than it would, were if it was sure. In other words, this is the policy of gradualism. There are, however, exceptions to this rule as in the case of inflation persistence.

12. There is a corollary to the Brainard’s principle. If central banks do not react under uncertainty or react gradually, as the Brainard principle would suggest, it could be difficult to manage inflation expectations. Therefore, anchoring inflation expectations becomes crucial, which is another important objective that we pursue through various tools including providing forward guidance.

13. Our fourth guiding principle is transparency, which provides predictability and credibility, and thereby enhances effectiveness. It also removes uncertainty from the minds of economic agents.

14. Lastly, clear communication of a central bank’s strategy and policy decisions, is a very potent underlay to achieve the objectives of monetary policy. It brings clarity of the approach and thus helps in both improving the transparency and anchoring inflation expectations.

15. Coming to the present crisis, it particularly impacts us as West Asia contributes about one-sixth of our exports, one-fifth of our imports, half of our crude oil imports, two-fifths of our fertilisers imports and almost two-fifths of our inward remittances. The appropriate monetary policy response to such a supply shock is to look through the first-round effect to the extent that it does not feed into second-round dynamics. Second-round effects are the real concern. They can materialise if the supply chain disruptions continue for long. Then, what began as a supply shock can become embedded in the general price level. Preventing this entrenchment is where monetary policy has a primary role to play — through its influence on inflation expectations rather than through blunt demand compression.

16. Moreover, in uncertain times such as this, it is important to be agile and nimble, maintaining a broad policy stance, and avoid making firm commitments of the future path of policy. In such circumstances, our broad approach has been to be even more data dependent and to continuously reassess the balance of risks. We are therefore in wait and watch mode now. Moreover, we have been maintaining a neutral stance for the last few policy cycles. It preserves the flexibility to respond as the inflation-growth dynamics evolve.

17. Our decade-long experience with the FIT, in navigating through persisting shocks from the pandemic to the Ukraine war, suggests that it has served us well.

18. Since we adopted FIT, our average headline inflation has dropped to 4.7% (September 2016 to December 2025), down from 7.4% in the years prior (April 2012 to August 2016).

19. Moreover, headline inflation volatility came down to 1.7% from 2.4% over the same period.

20. Inflation expectations are better anchored and less volatile.

21. Even in terms of global perspective, the FIT framework has been a success. From the highest average inflation among both AEs and EMDEs during 2006-2015, inflation in India has moderated to below the average of EMDEs during the last decade.

22. It is also pertinent to mention that post supply chain disruptions due to COVID and the Ukraine war, inflation in India converged to target faster than many advanced countries.

Role of fiscal-monetary coordination in ensuring price stability

23. While we do give credit to monetary policy and flexible inflation targeting for the improvement in price stability, I may mention that fiscal policy has an equally important role to play in this regard. This is specially so in a country like ours, where supply side factors play a large role in inflation.

24. The government has over the years complemented monetary policy actions with supply-side measures to check price pressures. First, the government has prioritised building resilience in agriculture and reducing its vulnerabilities arising from the vagaries of monsoons and crop diseases. This has been achieved by getting more land under irrigation; better seeds; crop management and post harvesting practices. Second, the government has strengthened the storage and supply chain infrastructure, besides building a retail distribution network for essential commodities to be used in times of prices pressures. Third, it has used excise duty on oil as an instrument to reduce the volatility of fuel prices.

25. During the current crisis, domestic production of oil and gas is being ramped up. Sources of imports are being diversified. While there is no shortage of oil, given the reserves maintained by us, there is some rationing of gas for industrial purposes. The oil marketing companies and government have absorbed the price pressures in oil, while passing on some of the price pressures on gas to the consumers.

26. Moreover, fiscal consolidation has progressed steadily in recent years, with enhanced efficiency in tax collections and improvement in the quality of expenditure.

27. On the revenue side, adoption of GST and sweeping reforms in income tax including digitalisation, simplification, rationalisation, and reducing human interface in tax assessment and collection have helped improve tax buoyancy3. Gross GST buoyancy (Centre plus State revenue) over the eight-year period post GST from 2018-19 to 2025-26 is 1.23. Buoyancy in corporate tax has generally been above one since corporate tax rate was reduced and personal income tax buoyancy has averaged 1.7 in the last five years.

28. On the expenditure side too, government spending is better targeted. The quality of expenditure has improved. Direct Benefit Transfer, which is estimated to have brought savings of about 50 billion USD (until March 2024)4; digitalisation of various government programmes like public distribution scheme; and just-in-time flow of funds to state governments are some examples of enhancing expenditure efficiency. Its approach to the pandemic is a case in point. Rather than front-loading stimulus packages, as most countries did, India adopted a flexible and agile approach to support the vulnerable sections of society and small firms.

29. Revenue expenditure as a percentage of GDP decreased to 10.8% in 2025-26 (RE) from 13.6% in 2021-22. In contrast, there has been a robust increase in capital expenditure. The share of central government’s capital expenditure as a percentage of GDP has surged from 1.7% in 2019-20 to 3.1% in 2025-26 (RE). Including the capital grants in aid to the states, it has increased to 3.9% (RE).

30. The central government’s fiscal deficit to GDP ratio has declined from 9.2% in 2020-21 to 4.4% in 2025-26 (RE). India’s general government debt to GDP ratio at 81.1% (in 2024-25) is reasonable, with the world’s top 10 economies (in terms of nominal GDP in USD), other than Germany and Russia5, having higher debt ratios than India.

II. Financial Stability

31. I now come to financial stability. It is the bedrock on which an economy prospers and grows sustainably.

32. Our pursuit of financial stability is duly reflected in our broader regulatory framework. We have been willing to sacrifice some short term upside for long term growth. While some regard this as conservatism, we believe it is prudence. This is evident from our resilience over various crises. I will highlight this with a couple of examples.

33. When the Asian financial crisis swept through the region in 1997–98, it brought down currencies and economies that had been held, only months earlier, as models of export-led development. India watched from a position of comparative stability, and the reasons were not accidental.

34. RBI had maintained controls on the capital account, particularly for residents. Short-term external debt was maintained at levels well below what foreign exchange reserves could comfortably cover. It refused to permit the kind of short-term foreign currency borrowing that had left our regional neighbours exposed to sudden reversals in sentiment. When intervention in the foreign exchange market was warranted, the RBI acted — but it did not commit to an indefensible peg. India’s current account deficit was manageable and foreign currency exposure reasonable. The lesson embedded is that for a country at India’s stage of development, the sequencing of capital account liberalisation is not a technicality — it is a first-order question of macroeconomic sovereignty.

35. If the Asian crisis demonstrated the importance of external discipline, the subprime crisis of 2007-08 showed the importance of maintaining internal discipline. As the global financial system was developing ever more elaborate and complex financial architecture through the mid-2000s, the RBI was doing something that appeared unpopular by prevailing standards. When in 2002, interest rates were falling and banks had no reason to anticipate a reversal, the RBI required them to build a counter-cyclical buffer called the Investment Fluctuation Reserve, against precisely that eventuality. Subsequently, during 2005-07, risk weights and provisioning requirements were raised, inter alia, for commercial real estate. On securitisation, recognition of profits was required to be spread over the life of securities. Moreover, accounting standards at the time did not permit the recognition of unrealised gains.

36. None of these was particularly popular at the time. But when the global financial system came under stress, these measures gained significance. Indian banks came out of the crisis with relatively stronger balance sheets.

37. We continue to value financial stability. A number of measures have been taken in the last decade. Asset Quality Review launched in 2015, Insolvency and Bankruptcy Code (IBC), 2016; alignment of prudential norms to global standards, and governance reforms in PSBs are some of them.

38. On account of these, our financial system is very healthy and resilient today, thereby supporting economic development.

III. Developmental Role

39. Maintaining price and financial stability are the core mandates of most of the central banks. But the role of RBI traverses beyond these confines. We have a large developmental role.

40. RBI played a critical role in financial inclusion. It collaborated with the government for the Jan Dhan program which was launched in 2014 on a mission mode. Leveraging the digital identity called Aadhar and mobile penetration under this mission, India ran the largest financial inclusion drive in human history in the last decade. Over 570 million bank accounts were opened for people who never had one. Almost everyone has a bank account today. This enabled Direct Benefit Transfers from governments, which bypassed the middlemen. It eliminated leakages. This revolution silently empowered people.

41. RBI has played a pivotal role in the development of UPI. This is a success story without any parallel. Today, India accounts for nearly half of the world's real-time digital payments volume. UPI processed over 22 billion transactions in March this year. The developmental mandate of RBI, a robust digital public infrastructure, widespread mobile ownership and low-cost data access along with a large presence of public sector in the banking space helped India leapfrog in digital payments. We have already taken UPI global with acceptance in 8 countries and are now working to connect it with many more including the European Central Bank's TARGET instant payment systems (TIPS).

42. We are currently building the Unified Lending Interface (ULI) to give lenders instant digital access to data, allowing them to assess credit worthiness within minutes for small farmers and business owners who previously had no documents to show or had to spend considerable time and effort at a bank.

43. We are also pushing the frontiers with our Central Bank Digital Currency (CBDC). It has the potential to make cross-border payments faster and cheaper. We are even testing programmability to direct payments for specific uses and purposes.

44. Our developmental mandate helps the national goal of inclusive growth.

V. Conclusion

45. Let me now conclude.

46. The resilience of the Indian economy is not by chance. It is because of the robust policy frameworks that have been successfully developed. It is due to the strong and credible institutions that have been assiduously built. It is on account of the various reforms undertaken steadily over the years. It rests on a foundation of stability and inclusion.

47. With these words, I thank you all for your patient audience. I will be happy to take questions, if any.

---

1 Pertain to the period 2015-16 to 2024-25 based on National Statistical Office (NSO) data.

2 Pertain to the period 2016-2025 based on IMF data.

3 Tax buoyancy is measured as a ratio of % change in tax revenue to % change in GDP.

4 https://dbtbharat.gov.in/static-page-content/spagecont?id=18

5 IMF Fiscal Monitor, April 2026.

Topics

Acts Income Tax