Domestic components of demand have played a key role in supporting growth in Q1FY26 and are expected to remain so in the next half year as well, the finance ministry said in a report.

India’s GDP growth was at 7.8% in the June quarter, surprising on the upside.

GST reform and domestic consumption

Recognising the need to strengthen domestic growth drivers amid these heightened external-sector risks, the government has announced a rationalisation of the Goods and Services Tax regime.

“This move is expected to lower the tax burden on consumers, boost consumption, and provide a cushion against tariff impacts,” the ministry said in its August monthly economic review. Additionally, it is likely to improve demand visibility for firms, enabling them to expand investment in additional capac

See Full Page