India Targets Consumption Growth with Tax Relief and RBI Rate Cut

Finance Minister Sitharaman highlights coordinated fiscal and monetary measures to boost private investment and economic recovery.

The Union Budget introduced zero income tax for individuals earning up to ₹12 lakh, increasing the threshold from ₹7 lakh, leaving an estimated ₹1.26 lakh crore in taxpayers' hands to spur consumption.
The Reserve Bank of India (RBI) announced a 25 basis point repo rate cut to 6.25%, the first reduction in five years, aimed at easing credit and reducing borrowing costs.
Finance Minister Nirmala Sitharaman anticipates a revival in private investments, citing early signs of increased bookings in fast-moving consumer goods and plans for capacity utilization reviews by industries.
The RBI projects GDP growth of 6.7% for 2025-26 and inflation at 4.2%, marking progress toward its 4% inflation target established in 2016.
RBI Governor Sanjay Malhotra emphasized the central bank's focus on ensuring adequate liquidity and facilitating frictionless credit delivery through a new Unified Lending Platform.