Finance Minister Nirmala Sitharaman on Friday reiterated the government's unwavering commitment to driving the 'Reform Express' through decisive policy measures aimed at sustaining economic momentum despite global headwinds. This comes even as the Reserve Bank of India (RBI) lowered its GDP growth projection for the financial year 2026-27 (FY27) to 6.6%, down from the 6.9% estimated in April.
RBI Cuts Growth Forecast Amid Global Uncertainties
The RBI's revised forecast attributes the downward adjustment to elevated energy and commodity prices, coupled with persistent supply disruptions stemming from the ongoing West Asia conflict. These factors have cast a shadow over the global economic outlook, prompting the central bank to temper its expectations for India's growth trajectory.
Strong Economic Performance in FY26
Despite the subdued outlook for FY27, the government highlighted robust economic performance in the preceding fiscal year. According to provisional estimates, India's real GDP grew by 7.7% in FY26, while real Gross Value Added (GVA) expanded by 7.9%. During the January-March quarter of FY26, both real GDP and real GVA recorded growth of 7.8% and 7.9%, respectively.
Several sectors posted double-digit growth in FY26, both at constant and current prices. These include manufacturing, trade, repair, hotels, transport, communication, broadcasting, storage, financial services, real estate, and professional services.
Government's Reform Agenda
In a post on X, Sitharaman stated, 'Our government, led by Hon'ble PM Shri @narendramodi is committed to further drive the 'Reform Express' with decisive policy measures to ensure positive economic momentum amidst the global challenges.' This reaffirmation underscores the government's focus on structural reforms to bolster the economy.
Tax Exemption for Foreign Investors
Earlier on Friday, the government took a significant step to attract overseas capital and ease pressure on the rupee. It exempted foreign investors from income tax on interest income and capital gains arising from investments in government securities. An ordinance was promulgated to amend the Income Tax Act, providing tax exemptions on interest income and capital gains from the sale, exchange, or transfer of government securities, as per a gazette notification dated June 5.
The exemption will be effective from April 1 and applies to any interest income or capital gains earned by Foreign Portfolio Investors (FPIs) on government securities on or after that date.
This move is expected to encourage foreign investment in Indian government securities, thereby supporting the rupee and enhancing capital inflows.
