Current Affairs - Economy

India’s net direct tax collections recorded an increase of 8% during FY26 up to 17 December 2025, indicating steady revenue growth for the government. This 8% rise was driven primarily by strong corporate tax collections and a significant reduction in tax refunds, which helped raise net receipts. Improved compliance, better advance tax payments, and stable business activity also played an important role. The 8% growth reflects the positive impact of tax administration reforms and economic resilience, supporting fiscal stability and providing the government with greater capacity to fund public expenditure and development initiatives.

The Asian Development Bank committed $4.26 billion in sovereign lending to India in 2025, marking a significant contribution to the country’s inclusive and sustainable development agenda. The funding supports a wide range of priority sectors, including skill development through ITI modernization, expansion of renewable energy via rooftop solar projects, urban infrastructure upgrades, metro and rapid rail expansion, healthcare improvements, and ecotourism development. This financial support aligns with India’s long-term growth strategy and reflects the Asian Development Bank’s role as a key development partner, focusing on clean energy transition, urban transformation, and human capital development.

India’s unemployment rate declined to 4.7% in November, marking the lowest level recorded since April for individuals aged 15 years and above. This improvement reflects a positive trend in the labour market as measured by the Ministry of Statistics and Programme Implementation under the Current Weekly Status framework. The decline was supported by easing unemployment in both rural and urban areas, alongside an increase in labour force participation. Rising workforce engagement and sectoral recovery contributed to improved employment conditions, indicating gradual strengthening of economic activity and job absorption across regions.

The Asian Development Bank approved a USD 240 million loan to support the expansion of the Chennai Metro Rail network as part of a larger USD 780 million financing facility. This funding aims to improve urban mobility through the development of new metro lines and stations while promoting inclusivity, safety, and climate resilience. The project focuses on cleaner and more reliable public transport, disaster-resistant infrastructure, and long-term financial sustainability. ADB’s involvement reflects its broader role in supporting India’s urban infrastructure, low-carbon development, and inclusive growth objectives.

India’s Consumer Price Index (CPI) retail inflation increased slightly to 0.71% in November 2025, up from 0.25% in October. The rise was primarily due to easing food deflation, which moderated from -5.02% to -3.91%. While rural inflation turned positive at 0.10% and urban inflation increased to 1.4%, the overall CPI inflation reflects a modest uptick driven by seasonal increases in vegetables, pulses, fruits, eggs, and meat & fish. The moderation of the base effect contributed to this rise, signaling a gradual recovery in price levels after a period of very low inflation.