RBI Bulletin - Aug 28, 2025

AUGUST 2025 VOLUME LXXIX NUMBER 8Editorial Committee Indranil Bhattacharyya Anujit Mitra Rekha Misra Anupam Prakash Sunil Kumar Snehal Herwadkar Pankaj Kumar V. Dhanya Shweta Kumari Anirban Sanyal Sujata Kundu Editor Asish Thomas George The Reserve Bank of India Bulletin is issued monthly by the Department of Economic and Policy Research, Reserve Bank of India, under the direction of the Editorial Committee. The Central Board of the Bank is not responsible for interpretation and opinions expressed. In the case of signed articles, the responsibility is that of the author. © Reserve Bank of India 2025 All rights reserved. Reproduction is permitted provided an acknowledgment of the source is made. For subscription to Bulletin, please refer to Section ‘Recent Publications’ The Reserve Bank of India Bulletin can be accessed at https://bulletin.rbi.org.inCONTENTS Bi-monthly Monetary Policy Statement (August 4 - 6, 2025) Governor’s Statement: August 6, 2025 1 Resolution of the Monetary Policy Committee (MPC) August 4 to 6, 2025 7 Statement on Developmental and Regulatory Policies 11 Speeches Inaugural Address at the FIBAC 2025 Conference 13 Shri Sanjay Malhotra Rethinking Regulations in an Interconnected Financial System 19 Shri M Rajeshwar Rao From Vanji to Viksit Bharat: Banking on Trust, Technology, and 29 Transformation Shri Swaminathan J Articles State of the Economy 35 Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 67 Equity Mutual Funds: Transforming India’s Savings Landscape 81 EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States 95 Horticultural Diversification: A Pathway to Agricultural Resilience 109 Current Statistics 125 Recent Publications 179MONETARY POLICY STATEMENT (AUGUST 4-6) 2025-26 Governor’s StatementGovernor’s Statement MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Governor’s Statement* available to us has helped accelerate monetary policy transmission in the current easing cycle. Sanjay Malhotra Decisions of the Monetary Policy Committee (MPC) The Monetary Policy Committee (MPC) met on Namaskar and greetings to all in this month of the 4th, 5th and 6th of August to deliberate and decide Raksha Bandhan, Independence Day, Janmashtami, on the policy repo rate. After a detailed assessment Parsi New Year and Ganesh Chaturthi. May this pious of the evolving macroeconomic and financial and auspicious month bring good luck to all of us and developments and the outlook, the MPC voted to our economy. unanimously to keep the policy repo rate under the The monsoon season has been progressing well. liquidity adjustment facility (LAF) unchanged at 5.50 We are also approaching the festival season, which per cent; consequently, the standing deposit facility typically brings greater enthusiasm and buoyancy (SDF) rate shall remain unchanged at 5.25 per cent in economic activity. This favourable domestic and the marginal standing facility (MSF) rate and the setting, together with supportive policies of the Bank Rate at 5.75 per cent. The MPC also decided to Government and the Reserve Bank, augurs well for continue with the neutral stance. the Indian economy in the near term, as geopolitical The MPC noted that, while headline inflation uncertainties have somewhat abated, even though is much lower than projected earlier, it is mainly global trade challenges continue to linger. Over the due to volatile food prices, especially of vegetables. medium-term also, the Indian economy holds bright Core inflation, on the other hand, has remained prospects in the changing world order drawing on steady around the 4 per cent mark, as anticipated. its inherent strength, robust fundamentals, and Inflation is projected to go up from the last quarter comfortable buffers. Opportunities are there for of this financial year. Growth is robust and as per the taking, and we are making all efforts to create earlier projections though below our aspirations. The enabling conditions through a multi-pronged yet uncertainties of tariffs are still evolving. Monetary cohesive approach to policymaking. policy transmission is continuing. The impact of the 100 bps rate cut since February 2025 on the economy Globally, policy makers are faced with muted is still unfolding. growth and slowing pace of disinflation, with some advanced economies even witnessing an uptick in On balance, therefore, the current macroeconomic inflation. As the dust settles and a new equilibrium conditions, outlook and uncertainties call for emerges in the new global order, policymakers will continuation of the policy repo rate of 5.5 per cent and have a tough task navigating a world characterised by wait for further transmission of the front-loaded rate cut to the credit markets and the broader economy. modest growth, sticky inflation and elevated public Accordingly, the MPC unanimously voted to keep debt levels. the repo rate unchanged. The MPC further resolved At the Reserve Bank, leveraging on the room to maintain a close vigil on the incoming data and provided by a significant moderation in inflation, we the evolving domestic growth-inflation dynamics have taken decisive and forward-looking measures to to chart out the appropriate monetary policy path. support growth. The coordinated use of various tools Accordingly, all members decided to continue with * Governor’s Statement - August 6, 2025. the neutral stance. RBI Bulletin August 2025 1MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Governor’s Statement Assessment of Growth and Inflation in the industrial sector remained subdued and uneven across segments, pulled down by electricity Growth and mining.10 While the manufacturing Purchasing Domestic growth is holding up and is broadly Managers’ Index (PMI)11 remained elevated in Q1, evolving along the lines of our assessment even the Index of Industrial Production (IIP)12 showed though some high-frequency indicators showed moderation. mixed signals in May-June. Rural consumption Turning to the growth outlook, the above remains resilient1 while urban consumption revival, normal southwest monsoon, lower inflation, especially discretionary spending, is tepid2. Fixed rising capacity utilisation, and congenial financial investment3 supported by buoyant government capex conditions continue to support domestic economic continues to support economic activity. activity. The supportive monetary, regulatory On the supply side, steady southwest and fiscal policies including robust government monsoon4 is supporting kharif sowing,5 replenishing capital expenditure,13 should also boost demand. reservoir levels6 and boosting agriculture activity. With sustained growth in construction and trade Moreover, services activity remains steady, though segments, the services sector is expected to remain some high-frequency indicators recorded a modest buoyant in the coming months. Prospects of external expansion.7 Services PMI8 increased to an 11-month demand, however, remain uncertain amidst ongoing tariff announcements and trade negotiations. The high of 60.5 in July 2025. Construction activity headwinds emanating from prolonged geopolitical continues to exhibit resilience.9 However, growth tensions, persisting global uncertainties, and 1 Tractor sales and retail two-wheeler sales posted a growth of 9.2 per volatility in global financial markets pose risks to the cent and 4.9 per cent, respectively, during Q1 of 2025-26. 2 As per the NielsenIQ’s Retail Audit Service, FMCG sales volume grew growth outlook. Taking all these factors into account, by 6.0 per cent during Q1:2025-26, with rural and urban areas recording real GDP growth for 2025-26 is projected at 6.5 per a growth of 8.4 per cent and 4.3 per cent, respectively. Retail sales of passenger vehicles grew by 3.0 per cent during Q1 and domestic air cent, with Q1 at 6.5 per cent, Q2 at 6.7 per cent, Q3 at passenger traffic expanded by 5.3 per cent during this period. 3 Central government capital expenditure grew at a strong 52.0 per cent 6.6 per cent, and Q4 at 6.3 per cent. Real GDP growth (y-o-y) during Q1:2025-26. Index of Industrial Production of capital goods for Q1:2026-27 is projected at 6.6 per cent. The risks expanded by 10.0 per cent and import of capital goods increased by 12.6 per cent in Q1:2025-26. are evenly balanced. 4 As of August 4, 2025, the cumulative south-west monsoon (SWM) rainfall is 4 per cent above the long period average (LPA). Inflation 5 The area sown under kharif crops as on August 1, 2025, is 5.1 per cent higher than the corresponding acreage of previous year. CPI headline inflation declined for the eighth 6 As of July 31, 2025, reservoir levels were at 69 per cent of the full capacity, well above last year’s level as well as decadal average of 46 per consecutive month to a 77-month low of 2.1 per cent cent. 7 E-way bills increased strongly by 19.3 per cent in June 2025 and toll collections increased by 15.2 per cent in June-July 2025. Growth of gross 10 Mining and electricity output contracted by 3.0 per cent and 1.9 per GST collections moderated to 6.9 per cent in June-July 2025 after a 16.4 per cent, respectively, during Q1:2025-26. cent growth in May. Domestic air cargo posted a growth of 2.6 per cent in 11 Manufacturing PMI surged to a 16-month high of 59.1 in July 2025, June 2025; port cargo witnessed a growth of 5.6 per cent in Q1:2025-26; signalling robust momentum in the manufacturing sector. sales of commercial vehicle contracted by 0.6 per cent in Q1. 12 Manufacturing IIP recorded a modest growth of 3.4 per cent during 8 PMI services climbed up to 60.4 in June 2025 and further to 60.5 in July, Q1:2025-26. from 58.8 in May. 13 As per the Union Budget 2025-26, the central government’s effective 9 Steel consumption grew by 7.9 per cent in Q1:2025-26 and cement capital expenditure (including grants-in-aid for creation of capital assets) production posted a growth of 8.4 per cent during this period. is budgeted to grow by 17.4 per cent. 2 RBI Bulletin August 2025Governor’s Statement MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) in June.14 This was driven primarily by a sharp decline Considering all these factors, CPI inflation for 2025- in food inflation, led by improved agricultural activity 26 is now projected at 3.1 per cent with Q2 at 2.1 per and various supply side measures. Food inflation cent; Q3 at 3.1 per cent; and Q4 at 4.4 per cent. CPI recorded its first negative print since February 2019 inflation for Q1:2026-27 is projected at 4.9 per cent. at (-) 0.2 per cent in June. Double-digit deflation in The risks are evenly balanced. vegetables and pulses drove this contraction.15 High- External Sector frequency price indicators signal a continuation of the India’s current account deficit (CAD) moderated lower price momentum in food prices to July as well. to 0.6 per cent of GDP in 2024-25 from 0.7 per cent Fuel group inflation moderated over two successive of GDP in 2023-24 due to robust services exports months to record 2.6 per cent in June.16 Core and strong remittances receipts despite higher inflation,17 which remained within a narrow range of merchandise trade deficit. Merchandise trade deficit 4.1-4.2 per cent during February-May, increased to 4.4 further widened in Q1 of 2025-26. India’s share in per cent in June, partly driven by a continued increase world services exports has risen markedly from about in gold prices. 2 per cent in 2005 to 4.3 per cent in 2024, driven by The inflation outlook for 2025-26 has become strong software and business services exports. Robust more benign than expected in June. Large favourable services exports19 coupled with strong remittance base effects combined with steady progress of the receipts are expected to keep CAD within the southwest monsoon, healthy kharif sowing, adequate sustainable level during the current financial year. reservoir levels and comfortable buffer stocks of On the external financing side, gross foreign foodgrains18 have contributed to this moderation. CPI direct investment (FDI) to India remained strong inflation, however, is likely to edge up above 4 per during April-May 2025-26. However, net FDI cent in Q4:2025-26 and beyond, as unfavourable base moderated during this period due to higher outward effects, and demand side factors from policy actions FDI.20 Foreign portfolio investment (FPI) inflows come into play. Barring any major negative shock to EMEs have remained strong in May and June to input prices, core inflation is likely to remain 2025.21 However, net FPI to India recorded outflows of moderately above 4 per cent during the year. Weather- US$ 0.8 billion in 2025-26 so far (April-July 31) due to related shocks pose risks to inflation outlook. outflows in the debt segment.22 External commercial borrowings, on the other hand, witnessed higher 14 CPI headline inflation declined to 2.1 per cent in June 2025 (lowest since January 2019) from 3.2 per cent in April, witnessing a cumulative net inflows compared to last year. Inflows under fall of around 110 bps. The moderation was primarily driven by a further easing in vegetables, pulses, and cereals prices, which resulted in deflation 19 As per provisional figures, India’s services exports grew by 10.1 per cent in the CPI food group for the first time since February 2019, at (-)0.2 per during April-June 2025-26, while services imports increased by 1.5 per cent cent in June. Fuel group inflation also moderated to 2.6 per cent in June during the same period. Net services exports grew by 20.7 per cent during from 2.9 per cent in April. Core inflation, however, edged up to 4.4 per the same period. cent in June 2025 after remaining broadly steady between 4.1 to 4.2 per 20 Gross foreign direct investment (FDI) inflows grew by 5 per cent to US$ cent during February to May. 15.9 billion in April-May 2025-26 from US$ 15.2 billion during the same 15 Vegetable prices declined by 19.0 per cent while pulses prices declined period a year ago. Net FDI inflows contracted by 2.2 per cent to US$ 3.9 by 11.8 per cent in June 2025. billion in April-May 2025-26 from US$ 4.0 billion a year ago. 16 Fuel group inflation also moderated to 2.6 per cent in June from 2.9 21 Net portfolio inflows into EMEs during June 2025 stood at US$ 42.8 per cent in April. billion as compared with US$ 16.8 billion in May 2025 (Source: Institute of 17 CPI headline excluding food and fuel. International Finance). 18 As on July 16, 2025, the stocks held by the Food Corporation of India for 22 During April-July 2025, there were net inflows of US$ 2.6 billion in wheat stands at 1.3 times the buffer norms (stocks highest in last 4 years) equity segment whereas debt segment witnessed a net outflow of US$ 3.5 and for rice, at 3.9 times the buffer norms. billion. RBI Bulletin August 2025 3MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Governor’s Statement non-resident deposits too remained positive, albeit the current easing cycle. In the credit market, the witnessing some moderation.23 As on August 1, 2025, weighted average lending rate (WALR) of scheduled India’s foreign exchange reserves stood at US$ 688.9 commercial banks declined by 71 basis points for billion, sufficient to cover more than 11 months of fresh rupee loans (of which 55 bps is due to interest merchandise imports.24 Overall, India’s external sector rate reduction) and 39 basis points for outstanding remains resilient.25 We remain confident of meeting rupee loans from February 2025 to June 2025. On our external financing requirements comfortably. the deposit side, the weighted average domestic term deposit rate (WADTDR) on fresh deposits moderated Liquidity and Financial Market Conditions by 87 bps during the same period. Moreover, the System liquidity, as measured by the net position transmission to lending rates has been broad based under the Liquidity Adjustment Facility (LAF), has across sectors. been in surplus, on an average of ₹3.0 lakh crore per Going ahead, the Reserve Bank will continue to be day since the last MPC, as compared to an average nimble and flexible in its liquidity management. We daily surplus of ₹1.6 lakh crore during the previous will endeavour to maintain sufficient liquidity in the two months.26 Going ahead, as the CRR cut announced banking system so that the productive requirements in the last policy comes into effect in a staggered of the economy are met and transmission to money manner beginning September, it would further markets and credit markets remains smooth. support liquidity conditions. An internal Working Group has reviewed The comfortable liquidity in the banking system the Reserve Bank’s extant Liquidity Management has reinforced transmission of the policy repo rate Framework (LMF), operative since February 2020. cuts to the money27, bond28 and credit markets during The Group has submitted its report and the same 23 Net inflows under external commercial borrowings to India increased to US$ 3.5 billion during April-June 2025-26 as compared with US$ 1.6 will be placed on the RBI website shortly for public billion a year ago. Non-resident deposits recorded a net inflow of US$ 1.9 consultation. The weighted average call rate (WACR) billion in April-May 2025-26, lower than US$ 2.8 billion in the same period last year. is found to be highly correlated with other overnight 24 Based on actual merchandise imports (on a BoP basis) during the four money market rates (TREPS and Market Repo) in the quarters period (Q1:2024-25 to Q4:2024-25) and around 94 per cent of total external debt as on end-March 2025. collateralised segments. Further, WACR is also found 25 India’s CAD/GDP ratio moderated to 0.6 per cent in 2024-25 from 0.7 to be effective in transmitting signals to other money per cent during 2023-24. India’s external debt to GDP ratio increased to 19.1 per cent at end-March 2025 from 18.5 per cent at end-March 2024. market instruments across maturities. Therefore, the The net International Investment position to GDP ratio improved to (-) 8.7 Group has recommended continuation of overnight per cent from (-) 10.1 per cent during the same period. 26 The average daily net absorption under the liquidity adjustment facility WACR as the operating target of monetary policy. The (LAF) during April and May stood at ₹1.5 lakh crore and ₹1.8 lakh crore, Group has, inter alia, also recommended to continue respectively. The average daily net absorption under the LAF further increased to ₹2.82 lakh crore in June 2025 and ₹3.12 lakh crore in July with the variable rate auction mechanism for repo 2025. The daily average absorption under the SDF increased to ₹2.17 lakh crore during June-July from ₹2.06 lakh crore during April-May 2025. and reverse repo operations of various tenors with 27 In response to the cumulative policy repo rate cut of 100 basis points the objective of maintaining the operating target rate (bps) in the current easing cycle (up to August 4), the WACR moderated by 108 bps. Since the February policy, 3-month T-bill rate declined by 110 bps, at the policy rate. 3-month CP issued by NBFCs by 161 bps and 3-month CD rate by 170 bps. 28 The 5-year and 10-year G-sec yield (6.79 GS benchmark) declined by Financial Stability 63 bps and 28 bps, respectively since the February policy. Over the same period, 5-year AAA corporate bond yields declined by 56 basis points. The system-level financial parameters related During this period, the Indian bond market was one of the best performers globally. to capital adequacy, liquidity, asset quality and 4 RBI Bulletin August 2025Governor’s Statement MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) profitability of Scheduled Commercial Banks (SCBs) to money markets has been faster, large corporates continue to remain healthy.29 Credit Deposit Ratio increasingly relied on market-based instruments such (CD ratio) for the banking system at the end of June as commercial paper and corporate bonds to source 2025 was 78.9 per cent, broadly similar to that an year funds, reducing their reliance on bank credit.33 Also, ago. Similarly, the system-level parameters of NBFCs as the profitability of large corporates has increased, too are sound, with adequate capital position and their internal resources have become an important source for business expansion. improved GNPA ratios.30 Additional Measures Bank credit grew at 12.1 per cent during 2024-25. While it is slower than the growth rate of 16.3 per cent Before I conclude, let me underline that for us at in 2023-24, it is higher than the average growth rate of RBI, the interest and welfare of the citizens of India is 10.3 per cent recorded in the ten-year period preceding foremost. It is the people of India, including those at 2024-25. Moreover, while the flow of non-food bank the bottom of the pyramid, who are our raison detre, credit during the financial year 2024-25 reduced by or the reason of our being. In this regard, I have three about ₹3.4 lakh crore from ₹21.4 lakh crore to almost consumer-centric announcements to make. ₹18 lakh crore, the flow from non-bank sources more One, as Jan-dhan Scheme completes 10 years, a than made up for this decrease.31 Thus, even though large number of accounts have fallen due for re-KYC. growth rate of bank credit slowed last year, the overall The banks are organising camps at Panchayat level flow of financial resources to the commercial sector from 1st July to 30th September, in an endeavour to increased from ₹33.9 lakh crore in 2023-24 to ₹34.8 provide services at customer doorsteps. Apart from lakh crore in 2024-25. This trend continues during opening new bank accounts and re-KYC, the camps the current financial year as well.32 As transmission will focus on micro insurance and pension schemes for financial inclusion and customer grievance 29 SCB Parameters: The outstanding credit and deposit on a y-o-y basis redress. increased by 9.9 per cent and 10.5 per cent, respectively, between June-24 and June-25. The system-level Capital to Risk Weighted Assets Ratio (CRAR) Two, we will be standardising the procedure for of 17.44 per cent in June 2025 was well above the regulatory minimum level. Ratio of non-performing loans improved further (GNPA ratio at 2.24 settlement of claims in respect of bank accounts, and per cent in June 2025 vis-à-vis 2.67 per cent in June 2024, NNPA Ratio at articles kept in safe custody or safe deposit lockers of 0.53 per cent in June 2025 vis-à-vis 0.60 per cent in June 2024). Liquidity buffers were robust, with an LCR of 132.80 per cent as of end June 2025. deceased bank customers. This is expected to make The annualised return on assets (RoA) and return on equity (RoE) stood at settlement more convenient and simpler. 1.34 per cent and 12.70 per cent, respectively, in June 2025. Net Interest Margin was 3.24 per cent for June 2025 (3.54 per cent in June 2024). 30 NBFC Parameters: Total CRAR of NBFCs was 25.78 per cent and Tier I Three, we are expanding the functionality in RBI CRAR was 23.83 per cent in June 2025, well above the minimum regulatory Retail-Direct platform to enable retail investors to requirements. GNPA ratio has improved from 2.47 per cent in June 2024 invest in treasury bills through systematic investment to 2.21 per cent in June 2025, while NNPA ratio also improved from 1.08 per cent in June 2024 to 0.95 per cent in June 2025. RoA for the sector plans. decreased slightly from 3.23 per cent in June 2024 to 3.11 per cent in June 2025. NIM has slightly decreased from 4.82% in June 2024 to 4.40% in Concluding Remarks June 2025. 31 The total flow of resources from non-banks (including domestic and I now make my concluding remarks. Despite foreign sources) increased by ₹4.3 lakh crore from ₹12.5 lakh crore in 2023- 24 to ₹16.8 lakh crore in 2024-25. a challenging external environment, the Indian 32 Bank Credit recorded a growth (y-o-y) of 9.8 per cent as on July 11, 2025 as compared to 14.0 per cent a year ago. Despite the slowdown in bank 33 CP issuances by non-financial entities increased to 0.78 lakh crore in credit, the total flow of financial resources remained at almost similar FY:2025-26 (up to June) compared to 0.30 lakh crore a year ago. Corporate levels during April-July 2025-26 as compared with the corresponding bonds issued by non-financial entities increased to 0.95 lakh crore in period of last year. FY:2025-26 (up to June) compared to 0.09 lakh crore a year ago. RBI Bulletin August 2025 5MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Governor’s Statement economy is navigating a steady growth path with frameworks across domains, and not just limited to price stability. Monetary policy has appropriately monetary policy, will be pivotal in its journey. We, used the policy space created by the benign inflation on our part, will continue to be agile and proactive outlook to support growth without compromising on in providing a facilitative monetary policy based the primary objective of price stability. Transmission on incoming data and the evolution of the growth- of our recent policy actions to the broader economy is inflation dynamics. As always, we will have a clear, underway. consistent and credible communication backed by actions necessary for the task at hand. As the Indian economy strives to attain its rightful place in the global economy, stronger policy Thank you. Namaskar and Jai Hind. 6 RBI Bulletin August 2025MONETARY POLICY STATEMENT (AUGUST 4-6) 2025-26 Resolution of the Monetary Policy Committee (MPC) August 4-6, 2025Monetary Policy Statement, 2025-26 MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Monetary Policy Statement, consumption, aided by rural demand, and fixed investment, supported by buoyant government capex, 2025-26 Resolution of the continue to boost economic activity. On the supply Monetary Policy Committee side, a steady south-west monsoon is supporting kharif sowing, replenishing reservoir levels and (MPC)* boosting agriculture activity. Moreover, services sector and construction activity remain robust. Monetary Policy Decisions However, growth in industrial sector remained The Monetary Policy Committee (MPC) held subdued and uneven across segments, pulled down its 56th meeting from August 4 to 6, 2025 under the by electricity and mining. chairmanship of Shri Sanjay Malhotra, Governor, As for the growth outlook, the above normal Reserve Bank of India. The MPC members Dr. Nagesh southwest monsoon, lower inflation, rising capacity Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, utilization and congenial financial conditions Dr. Poonam Gupta and Dr. Rajiv Ranjan attended the continue to support domestic economic activity. The meeting. supportive monetary, regulatory and fiscal policies After assessing the current and evolving including robust government capital expenditure macroeconomic situation, the MPC voted to maintain should also boost demand. The services sector is the policy repo rate at 5.50 per cent. Consequently, the expected to remain buoyant, with sustained growth standing deposit facility (SDF) rate under the liquidity in construction and trade in the coming months. adjustment facility (LAF) remains unchanged at 5.25 Prospects of external demand, however, remain per cent and the marginal standing facility (MSF) rate uncertain amidst ongoing tariff announcements and the Bank Rate at 5.75 per cent. This decision is and trade negotiations. The headwinds emanating in consonance with the objective of achieving the from prolonged geopolitical tensions, persisting medium-term target for consumer price index (CPI) global uncertainties, and volatility in global financial inflation of 4 per cent within a band of +/- 2 per cent, markets pose risks to the growth outlook. Taking all while supporting growth. these factors into account, projection for real GDP Growth and Inflation Outlook growth for 2025-26 has been retained at 6.5 per cent, with Q1 at 6.5 per cent, Q2 at 6.7 per cent, Q3 at 6.6 The global environment continues to be per cent, and Q4 at 6.3 per cent. Real GDP growth for challenging. Although financial market volatility and Q1:2026-27 is projected at 6.6 per cent (Chart 1). The geopolitical uncertainties have abated somewhat risks are evenly balanced. from their peaks in recent months, trade negotiation CPI headline inflation declined for the eighth challenges continue to linger. Global growth, though consecutive month to a 77-month low of 2.1 per revised upwards by the IMF, remains muted. The pace cent (y-o-y) in June 2025. This was driven primarily of disinflation is slowing down, with some advanced by a sharp decline in food inflation led by improved economies even witnessing an uptick in inflation. agricultural activity and various supply side Domestic growth remains resilient and is broadly measures. Food inflation recorded its first negative evolving along the lines of our assessment. Private print since February 2019 at (-) 0.2 per cent in June. * Released on August 6, 2025. High-frequency price indicators signal a continuation RBI Bulletin August 2025 7MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Monetary Policy Statement, 2025-26 of the lower price momentum in food prices this year Rationale for Monetary Policy Decisions to July as well. Core inflation, which remained within The MPC noted that the inflation outlook in the a narrow range of 4.1-4.2 per cent during February- near term has become more benign than anticipated May, increased to 4.4 per cent in June, driven partly earlier, and the average CPI inflation this year is by a continued increase in gold prices. expected to remain significantly below the target. This The inflation outlook for 2025-26 has become is driven mainly by lower food inflation that entered deflationary territory in June. However, CPI inflation more benign than expected in June. Large favourable is likely to edge up above the 4 per cent target from base effects combined with steady progress of the Q4:2025-26 onwards. Moreover, core inflation has southwest monsoon, healthy kharif sowing, adequate been rising steadily from the recent low of 3.6 per reservoir levels and comfortable buffer stocks of cent recorded during December-January 2024-25 and foodgrains have contributed to this moderation. CPI averaged 4.3 per cent in Q1 this year. Core excluding inflation, however, is likely to edge up above 4 per precious metals has witnessed an uptick and averaged cent by Q4:2025-26 and beyond, as unfavourable 3.4 per cent in Q1. base effects, and demand side factors from policy actions come into play. Barring any major negative Growth has held up well with some pick-up shock to input prices, core inflation is likely to expected in the coming festive season and is evolving remain moderately above 4 per cent during the in line with our assessment of 6.5 per cent for 2025-26. year. Weather-related shocks pose risks to inflation Thus, while headline inflation is much lower outlook. Considering all these factors, CPI inflation than projected earlier, it is mainly due to volatile food for 2025-26 is now projected at 3.1 per cent with Q2 prices, especially of vegetables. Core inflation, on the at 2.1 per cent; Q3 at 3.1 per cent; and Q4 at 4.4 per other hand, has remained steady around the 4 per cent. CPI inflation for Q1:2026-27 is projected at 4.9 cent mark, as anticipated. Inflation is projected to go per cent (Chart 2). The risks are evenly balanced. up from the last quarter of this financial year. Growth 8 RBI Bulletin August 2025 tnec reP Chart 1: Quarterly Projection of Real GDP Growth (y-o-y) 14 12 10 8 6 4 2 0 50 per cent CI 70 per cent CI 90 per cent CI CI - Confidence Interval 32-2202:1Q 32-2202:2Q 32-2202:3Q 32-2202:4Q 42-3202:1Q 42-3202:2Q 42-3202:3Q 42-3202:4Q 52-4202:1Q 52-4202:2Q 52-4202:3Q 52-4202:4Q 62-5202:1Q 62-5202:2Q 62-5202:3Q 62-5202:4Q 72-6202:1Q Chart 2: Quarterly Projection of CPI Inflation (y-o-y) 50 per cent CI 70 per cent CI 90 per cent CI CI - Confidence Interval tnec reP 10 8 6 4 2 0 32-2202:1Q 32-2202:2Q 32-2202:3Q 32-2202:4Q 42-3202:1Q 42-3202:2Q 42-3202:3Q 42-3202:4Q 52-4202:1Q 52-4202:2Q 52-4202:3Q 52-4202:4Q 62-5202:1Q 62-5202:2Q 62-5202:3Q 62-5202:4Q 72-6202:1QMonetary Policy Statement, 2025-26 MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) is robust and as per earlier projections though below the repo rate unchanged. The MPC further resolved our aspirations. The uncertainties of tariffs are still to maintain a close vigil on the incoming data and evolving. Monetary policy transmission is continuing. the evolving domestic growth-inflation dynamics The impact of the 100 bps rate cuts since February to chart out the appropriate monetary policy path. 2025 on the economy is still unfolding. Accordingly, all members decided to continue with On balance, therefore, the current macroeconomic the neutral stance. conditions, outlook and uncertainties call for The minutes of the MPC’s meeting will be continuation of the policy repo rate of 5.5 per cent and published on August 20, 2025. wait for further transmission of the front-loaded rate cuts to the credit markets and the broader economy. The next meeting of the MPC is scheduled from Accordingly, the MPC unanimously voted to keep September 29 to October 1, 2025. RBI Bulletin August 2025 9MONETARY POLICY STATEMENT (AUGUST 4-6) 2025-26 Statement on Developmental and Regulatory PoliciesStatement on Developmental and Regulatory Policies MONETARY POLICY STATEMENT 2025-26 (AUGUST 4-6) Statement on Developmental the procedures and standardise the documentation to be submitted to the banks. A draft circular in this and Regulatory Policies regard shall be issued shortly for public consultation. This Statement sets out the developmental and II. Financial Markets regulatory policy measures relating to (i) Regulation; 2. Introduction of Auto-bidding facilities in RBI (ii) Financial Markets. Retail Direct for Investment and Re-investment in I. Regulation T-bills 1. Standardisation of procedure for settlement of The Retail Direct portal was launched claims in respect of deposit accounts of deceased in November 2021 to facilitate retail investors to customers of banks open their Gilt accounts with the Reserve Bank under the Retail Direct Scheme. The scheme allows retail Under the provisions of Banking Regulation investors to buy Government Securities (G-Secs) in Act, 1949, nomination facility is available in respect primary auctions as well as buy and sell G-Secs in the of deposit accounts, articles kept in safe custody or secondary market. Since the launch of the Scheme, safe deposit lockers. This is intended to facilitate various new features, in terms of product as well as expeditious settlement of claims or return of articles payment options, have been introduced, including or release of contents of safe deposit locker upon launch of a mobile app in May 2024. death of a customer and to minimise hardship caused to family members. The extant instructions require To enable investors to systematically plan their banks to adopt a simplified procedure to facilitate investments, an auto-bidding facility for Treasury bills expeditious and hassle-free settlement of claims made (T-bills), covering both investment and re-investment by survivors/ nominees/ legal heirs, the procedures options, has been enabled in Retail Direct. The new vary across banks. With a view to enhance customer functionality helps investors to mandate automatic service standards, it has been decided to streamline placement of bids in primary auctions of T-bills. RBI Bulletin August 2025 11SPEECHES Inaugural Address at the FIBAC 2025 Conference Shri Sanjay Malhotra Rethinking Regulations in an Interconnected Financial System Shri M Rajeshwar Rao From Vanji to Viksit Bharat: Banking on Trust, Technology, and Transformation Shri Swaminathan JInaugural Address at the FIBAC 2025 Conference SPEECH Inaugural Address at the economy rebounded strongly post-COVID and recorded an average annual growth of around 8 FIBAC 2025 Conference* per cent during the last four years (2021-22 to 2024-25), supported by strong domestic demand Shri Sanjay Malhotra – both private consumption and fixed investment - amidst challenging global economic conditions. The IMF has projected that India will be the It gives me immense pleasure to participate fastest growing major economy. We are all set to in the FIBAC annual conference for this year. It become the third-largest economy in the coming brings together distinguished thought leaders and years. Inflation levels have generally reduced after stakeholders of the Indian economy and our financial implementation of the inflation targeting. Headline ecosystem to deliberate on critical and contemporary inflation recorded an eight year low of 1.6 per cent in issues facing the economic landscape of our country. July this year. The topic of the Conference “Charting New Frontiers” India’s fiscal situation too has seen significant is very relevant and topical as we respond to the new improvement after the post-COVID counter-cyclical challenges of tariffs and geopolitical uncertainties. fiscal response with a focus on the quality of I am sure that the discussions in this conference expenditure. The union government’s fiscal deficit will be very fruitful and provide deeper insights and to GDP ratio is budgeted to moderate from a high of guidance to all stakeholders, especially businesses, 9.2 per cent to 4.4 per cent of GDP in 2025-26. Quality regulators and governments. This is all the more of expenditure has improved. Central government’s important as we strive to contribute in our journey effective capital expenditure which includes capital for a Viksit Bharat by 2047. I compliment FICCI and grants-in-aid to the states is budgeted at 4.3 per cent IBA for organising this annual conference. of GDP for 2025-26. Corporate balance-sheets are I. India’s’ Story of Resilience and Stability healthy. Banks are well capitalised, with sufficient We celebrated our 79th Independence Day ten liquidity buffers, robust asset quality and reasonable days ago. We have made huge progress since our profitability. My compliments to the industry, independence. Our advancement spreads across especially the banking sector for this impressive sectors – education, health, agriculture, industries, performance. infrastructure, science and technology, defence, India’s external sector has also strengthened governance, finance, etc. The Indian economy has considerably over the last decade. The current expanded manifold. It continues to be a symbol of account deficit (CAD) has remained well within the resilience and hope. The achievements of the Indian sustainable limit in recent years - it was 0.6 per cent economy despite unprecedented challenges in the of GDP in 2024-25. This is due to robust services last few years are undoubtedly creditable and widely exports and strong remittance receipts despite recognised. higher merchandise trade deficit. Capital flows have The Indian economy today is characterised generally exceeded the CAD, adding to our foreign by robust macroeconomic fundamentals. Indian exchange reserves which stood at 695 billion USD as on August 15, 2025, providing merchandise imports * Inaugural Address by Shri Sanjay Malhotra, Governor, Reserve Bank of India at the FIBAC 2025 Conference, Mumbai, August 25, 2025. cover of over 11 months. RBI Bulletin August 2025 13SPEECH Inaugural Address at the FIBAC 2025 Conference Proactive fiscal and monetary policies, structural has not lost sight of the objective of growth. For reforms, massive upscaling of both physical and example, before covid, when growth was slowing, digital infrastructure, improved governance and and in recent months, when inflation was benign enhanced productivity and competitiveness, have all and growth needed to be supported, the Monetary contributed to this impressive performance. Policy Committee (MPC) reduced the policy repo rate. We will continue to conduct monetary policy We are at a critical juncture as we navigate the with the primary objective of price stability keeping choppy global economic environment characterised in view the objective of growth. by heightened trade uncertainty and persisting geopolitical tensions. We need to push the frontiers III. Regulation of Banks and NBFCs of growth. We all must step up our efforts to address Importance of regulation the emerging challenges and capitalise on the Despite increase in other sources of credit, the opportunities ahead. Generations of freedom fighters banks, NBFCs, HFCs and AIFIs regulated by RBI still gave us a free India, a Swatantra Bharat. We need to provide about 73 per cent of the credit needs of the now work for a Samridh Bharat, a prosperous India. real economy with banks providing about 53 per In this backdrop, I thought it appropriate to speak on cent. This shows the continued importance of RBI what we need to do together to further build on our regulated entities in meeting the credit needs of the economic development. I have divided this into five economy. major areas - monetary policy, regulation, financial inclusion, customer service and technology. It has been our endeavour to regulate these entities with an aim to ensure that the financial II. Monetary Policy system remains healthy and grows sustainably. The role of monetary policy in economic Here I would like to mention that regulations are prosperity is critical. One of the major conduits akin to friction. If friction is too less, one will fall of macroeconomic stability in India during recent while walking and if it is too much, progress will years despite multiple shocks, has been the decline be impeded. Regulations provide the necessary of inflation. Sharp spikes in food prices, volatile friction to promote financial stability and safety of oil prices, global supply chain disruptions, and depositors hard-earned money. However, stringent geopolitical tensions could have significantly stoked regulations may impede growth of the economy. inflation. However, proactive policy measures by The art of regulation-making lies in finding the the Reserve Bank, including timely interest rate right balance between safety and growth - “the adjustments and liquidity management, alongside right amount of friction”. Pursuit of this balance, or prudent supply side measures by the government, optimal regulation, is indeed our constant endeavour have helped contain generalisation of price pressures. in the RBI. Anchored inflation expectations too have supported Our approach to regulation making stable consumption patterns and improved investor Our regulatory framework is based on five confidence. The primary objective of monetary principles or characteristics: policy in terms of price stability has significantly contributed to the strength of India’s macroeconomic a. First, we have gradually pivoted from being fundamentals. At the same time, the Reserve Bank prescriptive to largely principle based. 14 RBI Bulletin August 2025Inaugural Address at the FIBAC 2025 Conference SPEECH b. Second, we have espoused the idea of applicable risk weights for lending to NBFCs as risks proportionality to strike a fine balance abated. Similarly, the provisioning requirement between costs and benefits of regulation. for government guaranteed security receipts were Impact analysis is an integral component of reviewed in view of their sovereign nature. We have this. updated the priority sector lending (PSL) guidelines to boost credit to underserved segments. We c. Third, we are consultative in our approach. rationalised run-off factors, which will potentially We realise that we need to understand the lead to a cumulative improvement in LCR of about perspectives of all stakeholders. We organise 6 percentage points for the system as a whole. outreach with industry, associations, banks, Similarly, we have come out with comprehensively NBFCs and other regulated entities. We have rationalised regulatory framework for investments also operationalised ‘connect to regulate’ for in Alternative Investment Funds (AIFs), co-lending, direct connection with our stakeholders. We non-fund-based facilities, project finance, and gold seek your active support in giving feedback loans to name a few. These are examples of how we and suggestions for better regulation-making. have been agile, consultative, evidence-oriented, d. Fourth, we attempt to be evidence based. We principle-based, and proportional in our regulation- gather information through our interaction making. and outreach as also through our supervisory Proposed regulations teams. Some of the REs may be feeling the burden of our information seek from them. Going forward, we will continue this approach. But, information is important for regulation- Our focus will be three-fold. First and foremost, we making. We seek your assistance in this will continue strengthening financial stability. We regard. intend to implement Basel III guidelines for market, credit and operational risk from 1.4.2027, for which e. Fifth, we are agile and we adapt with change credit risk and ECL related draft guidelines are in context, availability of new information, proposed to be issued soon. The Forms of Business and the evolving landscape. We have not circular is also planned to be finalised quickly. hesitated in relaxing a stringent rule, once deemed necessary, if the context changes Second, we will endeavour to enhance ease of and the cost-benefit balance reverses. doing business. We have already rationalised the returns that regulated entities have to submit to us. We What we do as a matter of practice, has now are in the process of consolidating all the regulations been institutionalised through the recently released for various categories of regulated entities. In our “Framework for Formulation of Regulations” which pursuit of making principle-based framework, we codifies this approach, that I just highlighted. have given autonomy to the board of the respective Regulatory Developments in Recent Past entities to frame policies. While the intent was to Entering into this calendar year, we have leave detailed policy-making to the judgement of the rationalised the applicable prudential norms bank, it has resulted in overburdening the boards for Urban Cooperative Banks (UCBs) to accord of the regulated entities. Therefore, we are trying flexibility in their operations; we restored the to rationalise the macro-policies that need to be RBI Bulletin August 2025 15SPEECH Inaugural Address at the FIBAC 2025 Conference approved by the Boards of the regulated entities, and banking access to almost all villages within a radius leave the procedural and routine matters with the of 5 kilometres, there is scope to further enhance management so that the Board gets quality time to it. Business Correspondents (BCs) are an effective deliberate on strategic and important matters. channel for providing services in sparsely populated areas of our country. This channel needs to be Third, we are examining measures to expand strengthened to improve the quality, consistency bank credit towards productive sectors and reduce and reach of financial services. Not only is there is cost of intermediation. a scope to augment them, but there is also a need As announced earlier, we propose to set up a to train them and expand the number of services Regulatory Review Cell with the mandate to review they can provide. On one hand, this will make the each regulation in a comprehensive, objective, BCs financially viable and sustainable; on the other systematic and structured manner. The objective of hand, it will improve quality and reach of services. the review shall be to assess each regulation with focus on efficiency; its impact in terms of cost and Towards the objective of financial inclusion benefit; its requirement in the current context and and to ensure uninterrupted access to the financial market realities; consistency and clarity especially services, banks have launched a country-wide across different regulations; and potential of campaign from July 1, 2025 to September 30, 2025 at unaddressed or emerging risks, among other things. Gram Panchayat level. I urge all the banks to step up The Cell shall organise its work in such a manner their efforts through these camps towards enhancing that each regulation is reviewed at least once in every the coverage of re-KYC and the social security 5-7 years. The Cell will interact with major financial schemes. I also seek your support to Financial sector industry bodies. Literacy Centres (FLCs) and Centres for Financial Literacy (CFLs), being operated under our aegis. IV. Financial Inclusion Another area of focus is the Micro, Small, Economic development is incomplete if it is not and Medium Enterprises (MSME) sector which inclusive. We believe in the adage “if you want to contributes significantly to employment, exports and go fast, go alone; if you want to go far, go together”. output. There is a significant credit gap to MSMEs. We need to take everyone together and especially Banks and NBFCs should make special efforts to those at the bottom of the pyramid. We have made boost formal credit to them. They should leverage considerable progress in financial inclusion over the years as reflected in the Financial Inclusion the public digital infrastructure like the Unified (FI)-Index constructed by the RBI which is based Lending Interface (ULI), in this endeavour. on the three dimensions of financial inclusion, V. Customer Service ‘Access’, ‘Usage’ and ‘Quality’. Notwithstanding the Consumers are the raison detre or the purpose considerable progress, FI-Index point towards scope of our being. Customer-centricity is fundamental for for further improvement in usage and quality while sustainable growth of any business. also addressing gaps in access. Conduct related regulations Let us remember we have a responsibility to all the people of our country, almost two-thirds, of At the Reserve Bank, we are passionately driven which resides in rural areas. While, we have provided by the objective of customer-centricity. Key Fact 16 RBI Bulletin August 2025Inaugural Address at the FIBAC 2025 Conference SPEECH Statement and integrating explicit conduct related maintain trust, it is essential that regulated entities aspects in our regulations are some examples in this (REs) put in place a robust and effective mechanism regard. Recently released revised guidelines on pre- to redress the grievances of aggrieved customers payment charges and draft guidelines on settlement proactively in a just, transparent, timely and of claims in respect of deceased customers also affordable manner. They should periodically assess reflect our customer-first approach. the types of complaints, conduct a root cause analysis and implement systemic corrective measures in Consumer service by REs product design, processes, and employee conduct. Similarly, regulated entities must focus on It is further suggested that customer satisfaction excellent and seamless service and experience, related KPIs are included in performance appraisal creating customer delight. They need to be and variable pay of key functionaries. transparent, fair, and responsive. While digitalization VI. Technology to enhance credit and efficiency is a key, the human aspect too cannot be neglected, for which training, especially on behavioural aspects, Use of technology is a sine quo non for any needs to be emphasized. business. It has become the core engine for improving decision making and customer service, moving far I had on an earlier occasion urged the Banks beyond its traditional role of driving efficiency. to enable the use of CKYCR at KYC touch points. I Regulated entities need to accelerate its adoption as had also highlighted that the number of grievances they strive to enhance credit and reduce costs. escalating to the RBI Ombudsman is very high. It was also expected that each RE has an effective grievance RBI too has adopted technology in all its redressal mechanism, where officers are suitably functions. The Account Aggregator (AA) ecosystem empowered to take decisions in consumer interest. is empowering customers with control over their I exhort the regulated entities to make further financial data. ULI is making credit delivery improvements in these areas. seamless, making it truly transformative. We will further strengthen these platforms. We have Further, we are in the process of reviewing the implemented PRAVAAH platform for improving Internal Ombudsman framework at the level of REs services to regulated entities. We will continue to to further strengthen it and ensure that complaints embrace technology including AI and ML and expect get resolved effectively within the institution itself. our regulated entities too invest in it. We are also reviewing the RB-IOS to enhance its effectiveness, transparency and customer-centricity VII. Concluding remarks as an alternate grievance redressal mechanism. To conclude, I would like to emphasise that Further, we intend to enhance the consistency while we might seem to be on opposite sides – with and adequacy of compensation awarded under the the regulated entities trying to accelerate growth and Ombudsman framework. We also plan to expand the the regulators focusing on stability, we actually have set of services, non-timely provision of which may the same objectives. We are in the same team with be liable for payment of penalty. a shared vision of a Viksit Bharat. There is no tussle Consumer’s trust is vital not only for the between financial stability and growth. Financial regulated entity but also for the stability and stability and price stability do not inhibit growth. Far resilience of the banking system. To build and from it, they are essential for sustainable growth. RBI Bulletin August 2025 17SPEECH Inaugural Address at the FIBAC 2025 Conference I look forward to working together with the Lastly, in your respective roles, I urge you not regulated entities to improve the efficiency and to ever lose sight of the people you are serving. effectiveness of financial intermediation to ensure At the cost of sounding a bit sermonic, I must say that the due benefits reach the people of our nation. that if there is any doubt in your mind, espouse the Likewise, on the demand side, I urge the industry philosophies of Gandhi’s Talisman, or Antyodaya. to invest boldly and champion the entrepreneurial Take decisions keeping in mind how your actions will spirit that defines our nation. At a time, when balance impact the most vulnerable person of our country. sheet of banks and corporates are at their best, they I wish the conference a huge success. should come together and drive the animal spirits to Thank you. Namaskar. Jai Hind. create an investment cycle which is so important at this juncture. 18 RBI Bulletin August 2025Rethinking Regulations in an Interconnected Financial System SPEECH Rethinking Regulations in an regulations for a rapidly evolving and interlinked financial ecosystem; and conclude by sharing a few Interconnected Financial thoughts on the way forward. System* The role and evolution of financial sector regulations in India Shri M Rajeshwar Rao To set the stage, it is essential to start by tracing Participants of the ‘Management Development the evolution of financial sector regulations in Programme on Financial Market Regulations’, India, which commenced with the establishment of Professors, ladies, and gentlemen. A very good the Reserve Bank of India (RBI) in 1935. The Bank’s morning to all of you! remit was expanded in 1949 to cover regulation and supervision of commercial banks1. This was At the outset, I would like to thank IIM, Kozhikode succeeded by empowering it to regulate and supervise for inviting me here. It is a pleasure to address such non-banking institutions2 now commonly referred a diverse gathering, ranging from policy veterans to to as Non-Banking Financial Companies (NBFCs) in important stakeholders across the financial landscape. 19643 and thereafter Urban Co-operative Banks (UCBs) The contents of programme span the issues around in 19664. the regulatory framework of a diverse mix of entities operating in the financial markets including banks, The year 1991 is extremely significant as it ushered securities firms, and insurance entities. in key economic reforms which helped to transform Financial markets span a wide array of products and grow our economy. The reforms in the financial starting with money markets, G Secs, forex, equities, sector started in a way, with the implementation of commodities, and derivatives. These products are the recommendations of the Narasimham Committee traded bilaterally, over the counter, or increasingly on financial sector reforms. The entry of private on electronic trading platforms or on exchanges. banks, introduction of prudential norms for banks, The entities are diverse, and they are active in many and alignment of capital adequacy requirements with of these markets. They are regulated by different global standards based on the recommendations of regulators depending on the nature of entities and/or the Committee and conferring of statutory powers to their activities. The markets are interconnected with the Reserve Bank to exercise greater oversight over the spillover risks from one set of market activities into NBFCs were important policy landmarks during this another, increasingly becoming a point of concern period. This together with the subsequent changes in from the point of view of financial stability. In my the monetary policy framework5, the liberalisation of remarks today, I would like to, therefore, share a 1 https://rbi.org.in/history/Brief_Chro1935to1949.html few perspectives on the need for market and entity 2 Act 055 of 1963: Banking Laws (Miscellaneous Provisions) Act, 1963 (https://www.casemine.com/act/in/5a979d964a93263ca60b70c7) regulations and their interplay, the tools employed 3 Chapter IIIB of RBI Act, 1934. by the regulators and the challenges faced in framing 4 https://rbi.org.in/history/Brief_Fun_UrbanCoopBanks.html 5 From abolishing of automatic monetization through ad-hoc T bills to * Inaugural Address delivered by Shri M Rajeshwar Rao, Deputy Multiple Indicators approach from 1998 to 2009, followed by a transition Governor, Reserve Bank of India – August 18, 2025 - at the DoPT MDP period with pre-conditions to kick in inflation as the nominal anchor on Financial Market Regulations at the Indian Institute of Management guided the monetary policy from 2013 to 2016 and, thereafter, the Flexible Kozhikode (IIMK). Inputs provided by Chandni Trehan Saluja and Nilesh Inflation Targeting framework: https://rbi.org.in/commonman/english/ Dnyanoba Gawade are gratefully acknowledged. Scripts/speeches.aspx?Id=3161 RBI Bulletin August 2025 19SPEECH Rethinking Regulations in an Interconnected Financial System the exchange control regime and the grant of powers is crucial to ensure stability, transparency, and to regulate the Payment and Settlement Systems as protection of the financial sector against systemic well as the money, foreign exchange, and government risks. Nobel Laureate Joseph Stiglitz in his influential securities (G-Sec) markets to the Reserve Bank, have book Freefall: Free Markets and the Sinking of the collectively influenced the changes in the approach to Global Economy writes, “The crisis has made it clear regulation making at the Reserve Bank. that self-regulation – which the financial industry promoted and which I view as an oxymoron – doesn’t The Securities and Exchange Board of India work.” Time and again it has been proven that (SEBI) was statutorily entrusted with regulation and financial regulation is essential not only to prevent development of the securities market in the year market failures, but also to protect consumers and 19926. The subsequent decades saw establishment safeguard the stability and resilience of the broader of new financial sector regulators in the form of the economy, particularly in times of crisis. The common Insurance Regulatory and Development Authority misconception that regulation inherently imposes of India (IRDAI) to oversee the regulation of the restrictive barriers, is inaccurate. A well-designed insurance and reinsurance sectors and of the Pension financial oversight framework underpinned by Fund Regulatory and Development Authority (PFRDA) thoughtfully crafted regulations not only ensures a for pension funds. More recently in 2020, the level playing field but also fosters sustainable growth International Financial Services Centres Authority and development. (IFSCA) was created to regulate and promote financial How do we regulate financial systems7 products, services, and institutions within India’s International Financial Services Centres. Collectively, Before delving into the specific approaches to these regulators play a critical role in the journey of regulation-making, it is important to first reflect on the transforming India’s financial system into a more broader frameworks for financial system regulation, resilient, market-driven, and consumer-centric especially considering that alternative models of ecosystem, while facilitating sustainable economic financial oversight are in vogue. growth of the country. The regulatory oversight architecture for financial systems can be broadly categorised into three main Approach for Regulation making models. The first model is known as ‘sectoral or The market-oriented laissez-faire approach traditional model’, in which each of the financial towards Regulation of financial markets with minimal sector authorities is responsible for both - prudential regulations operates on the assumption that self- and conduct aspects of the specific financial sector, i.e., regulation will be effective. However, this view has banking, insurance, securities and market integrity. been contested by some economists and policymakers This approach has been followed by countries like who argue that regulation is not just necessary but India, Brazil, Hong Kong and Mexico and remains essential. They contend that the idea of inherently the most commonly used model around the world. self-correcting markets is more of an ideological fad However, challenges arise in such a model while than a factual occurrence, and that effective oversight 7 https://www.bis.org/fsi/publ/insights8.htm and 6 SEBI was established in 1988 as a non-statutory body for regulating https://www.researchgate.net/publication/290574692_Approaches_to_ securities market. Financial_System_Regulation_An_International_Comparative_Survey 20 RBI Bulletin August 2025Rethinking Regulations in an Interconnected Financial System SPEECH dealing with financial conglomerates, whose activities Conduct Authority which focuses on market conduct, blur the boundaries between different types of and the Prudential Regulation Authority (under the financial institutions. Such trade-offs can be smoothed aegis of Central Bank) responsible for the prudential by introducing complementary arrangements, like regulation and supervision of banks, building societies, those adopted by Indian Financial Sector Regulators credit unions, insurers and major investment firms. (FSRs), which I will discuss later. The Twin Peaks model leverages potential synergies arising in the prudential or the business conduct An alternative approach is the ‘integrated model’, oversight of various types of financial institutions but where a single agency oversees all oversight functions faces similar challenges of lack of sectoral focus as in including regulations across the finance industry. the integrated model and co-ordination challenges as This model was adopted by Singapore in 1984 as in sectoral model. a consequence of reforms in financial oversight architecture. Later Scandinavian countries adopted The Two Agency model is another example of similar models, followed by the UK, which established the partially integrated model where one agency a single Financial Services Authority (FSA) in 1997. is responsible for the regulation and supervision Further, countries like Russia, Japan, Germany and of both solvency and conduct of business for banks South Korea have adopted this model in their financial and insurance companies, and a second agency is architecture. While this approach offers a cohesive and responsible for market integrity and the securities streamlined framework for overseeing the financial business. It is currently in place in jurisdictions such sector, enabling unified decision-making, reduced as France, Italy, Malaysia, Saudi Arabia, etc. regulatory arbitrage, and improved co-ordination, it The models in the United States (US) and the may present some operational challenges like risk of European Union (EU) have special characteristics. possible single point of regulatory failure, dilution of While in the US functions have been assigned to sectoral focus and reduced flexibility in addressing various agencies at the federal and state level, in the the needs of different sub-sectors. EU, countries within the euro zone share a single prudential supervisory authority for significant banks. The third model involves grouping responsibilities More recently, after the GFC, the macroprudential either according to regulatory and supervisory goals policy and resolution functions were the areas which or according to sectors, i.e., partially integrated were added to the financial oversight architecture, approach. The ‘Twin Peaks’ model is an example of which may or may not involve separate agencies this, where two separate agencies manage each of the depending on the type of model adopted. prudential oversight and conduct of business for all types of financial institutions. This model was first Each model includes trade-offs between synergies adopted in Australia in 1997, followed by Netherlands and potential conflicts of interest and challenges. The in 2002 and thereafter introduced in Canada and decision to adopt a financial oversight model depends South Africa. After the Global Financial Crisis (GFC), on the structure and evolution of the financial sector, the UK restructured its regulatory framework by legal, cultural, and political economy considerations replacing the integrated model with Twin Peaks model as well as past experiences like dealing with financial by bifurcating FSA in two institutions - the Financial crises. Whichever be the model, one of the key RBI Bulletin August 2025 21SPEECH Rethinking Regulations in an Interconnected Financial System features of any financial oversight architecture is the may also face challenges when dealing with complex Central Bank remains the primary or lead authority. and dynamic issues where nuanced judgment is Its leadership in coordinating with other regulatory required. The Master Directions on Priority Sector entities reinforces the coherence, resilience, Lending – Targets and Classification9 can be considered and credibility of the overall financial oversight as an example of a rule-based regulation issued by the architecture. Bank. Let me now touch upon the approaches adopted Another approach which has gained prominence by regulators for the regulation-making process. of late is the outcome-based regulation, with focus on While there may be differing views on the most apt desired outcomes or results rather than prescribing approach to regulations, there is no ‘one size fit all’ specific processes and tools. This approach sets “what” approach. Regulators use different approaches and is the desired outcome, while providing flexibility on tools to address varied types of problems for effective “how” to achieve it. The RBI’s Directions on Digital regulation. Lending10 emphasise on the desired outcome, i.e., transparency and fairness for borrowers, rather than Principle vs. Rule vs. Outcome based regulation getting into specifics like lending rates or methods. Principle based regulation is qualitative and uses high-level statements with an explanation of the Striking the right balance amongst these underlying intent. It gives flexibility and freedom to approaches is critical to creating an enabling, and a Regulated Entity (RE) to innovate by developing new effective regulatory environment while encouraging products and services without being constrained by innovation, given the complexities of today’s dynamic prescriptive rules. However, it is open to subjective financial landscape. interpretation and can therefore pose challenges for Activity vs. Entity based regulation both REs and supervisors, thus limiting enforcement Activity-based regulation prescribes regulatory and accountability. It may also be less effective in obligations for specific activities, independent of the areas like consumer protection, where clear and entity undertaking them. It works on the principle of actionable directions are essential. In the context of “same activity, same risk, same rules”. The Directions Reserve Bank as a banking regulator, the Prudential issued on Financial Services provided by Banks11 can Framework for Resolution of Stressed Assets8 is an be categorised as activity-based regulation. example of principle-based regulation. In contrast, entity-based regulation aims to bolster Rule-based regulation, on the other hand, the resilience of activities with focus on the entity. requires an RE to comply with specific, prescriptive This approach encompasses governance, prudential requirements. It leads to better clarity, compliance, and conduct requirements, reinforced by supervisory and consistency, as it simplifies the understanding of interventions. Given that an entity’s overall resilience regulations for an RE and consumer alike. However, it is shaped by the composition of its activities, entity- may lead to a ‘check-the-box’ mentality, resulting in compliance by REs in letter but not in spirit. The REs 9 https://rbi.org.in/scripts/NotificationUser. aspx?Id=12799&fn=2754&Mode=0 8 https://www.rbi.org.in/Scripts/NotificationUser. 10 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12848&Mode=0 aspx?Id=11580&Mode=0 11 https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=10425 22 RBI Bulletin August 2025Rethinking Regulations in an Interconnected Financial System SPEECH based regulations place targeted restrictions – an Market vs. entity regulation essential feature of such regulation. The prudential Market-based regulation focuses on the overall norms on capital adequacy are in nature of entity- structure and functioning of financial markets, based regulation. while entity-based regulation deals with the Given the distinct regulatory domains, and prudential norms, conduct, solvency, and internal keeping in view the objective of financial stability, risk management of individual financial institutions. regulators often adopt a hybrid approach that Although each Financial Sector Regulator (FSR) such as integrates elements of both activity-based and entity- the RBI, SEBI, IRDAI, PFRDA, or IFSCA has its distinct regulatory domain, activities of many of their REs based regulation. Such a tailored regulatory framework overlap. Depending on their activities, these entities enhances the comprehensiveness and resilience may fall under multiple regulatory frameworks, of oversight mechanisms. It allows regulators to resulting in differential oversight and heightened respond more effectively to market developments operational complexity. For example, a mutual fund and emerging risks, thereby strengthening the overall or an insurance company participating in government regulatory architecture and promoting a sound, stable, securities market or a bank participating in corporate and inclusive financial system.12 bond market. To address such overlaps, FSRs are Rules based vs. Risk based approach13 increasingly adopting a co-ordinated approach to Rules-based regulation focusses on adherence to regulation and supervision, with the broader goal of regulatory prescriptions regardless of the level of risk. ensuring financial stability. Though beneficial at times, the approach should factor Challenges in regulation making in principle of proportionality, as not all entities carry Regulation making is a complex process starting same amount of risk to financial stability or consumer from identification of risks or gaps in existing protection. regulations, evaluation of options to address them Adopting a risk-based approach enables regulators and finally coming out with an appropriate and to frame regulations that are both effective and effective regulation which is intended to address proportionate in the dynamic financial environment the risks for the entity and for the financial system of today. This also helps in directing scarce regulatory (prudence, resilience and stability) and/or empower and supervisory resources in optimal manner while the consumers and ensure fair conduct amongst also fostering innovation and financial inclusion. The entities (conduct issues). While treading this path, the Scale Based Regulation issued by RBI for Non-Banking regulators are often confronted with many challenges. Finance Companies (NBFCs)14 and revised regulatory Let me highlight a few of them. framework for Urban Co-operative Banks (UCBs)15, Balancing innovation and stability16 can be thought of as recent examples of a risk-based Innovation in the financial sector has brought approach. about transformative changes. However, the rapid 12 https://www.fsb.org/uploads/P160724-2.pdf and https://www.bis.org/fsi/ pace of innovation, also leads to regulatory gaps fsipapers19.pdf 13 https://www.fsb.org/uploads/P160724-2.pdf or grey areas. Innovations often take shape of new 14 https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12550 15 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12416&Mode=0 16 https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1453 RBI Bulletin August 2025 23SPEECH Rethinking Regulations in an Interconnected Financial System business models and partnerships with third parties, (II) Emerging technologies who are outside the regulatory ambit of the FSRs. It New technologies improve ease of doing business, is the job of the regulator to plug these loopholes by reduce operational and compliance costs, but they framing rules in such a manner that allows innovation also pose challenges for regulation. There are three to thrive but provide sufficient guardrails to ensure primary challenges in regulating these technologies: that financial system remains stable and resilient. (i) the unpredictable nature of business models The regulators are therefore adopting a more agile that rely on emerging technologies, (ii) data privacy, and forward-looking approach - like the development security, ownership, and control, and (iii) the artificial of regulatory sandboxes and enhancing dialogue with intelligence (AI) conundrum.18 One example of new key stakeholders for integrating the new players into business models is Banking-as-a-Service (BaaS) model the regulatory framework, while being mindful of which increases scale and speed of distribution of financial stability. financial products but could also lead to significant business conduct risks. Regulators face a dilemma: Keeping pace with emerging risks and technologies whether to come out with a framework before such The regulators need to keep pace with dynamically financial innovations happen or allow markets to changing markets and deal with emerging risks and develop, risking unanticipated systemic risks and technologies. This requires regulators to devise exploitative consumer practices.19 Additionally, approaches to ensure that consumers are treated fairly regulators must navigate capacity constraints and and also ensuring the safety of the financial system, legal complexities in crafting effective regulations. while providing space for innovation. I would like to Here too, we have adopted a cautious approach highlight two examples of the challenges faced by the while coming out with regulations like digital lending regulators. directions covering partnerships between FinTechs (I) Climate risk (as Lending Service Providers) and REs, introduction of Video based Customer Identification Process Addressing climate change not only requires (V-CIP) etc., in these emerging technology areas. transition towards sustainability, but also integration The RBI had constituted a committee to develop a of climate related financial risks into regulatory robust, comprehensive, and adaptable Framework framework. Regulators across the world are debating for Responsible and Ethical Enablement of Artificial whether climate risk warrants a separate framework or Intelligence (FREE-AI) for the Financial Sector20 which should it be embedded within existing risk categories. has come out with a principle-based approach to AI There is also ongoing discussion on whether climate adoption in the financial sector. risk oversight should form part of Pillar 2 (supervisory review), or Pillar 1 (capital and liquidity requirements). Reducing regulatory burden and ensuring compliance This continues to engage the attention of the standard India has made notable progress in improving its setting bodies, industry and other stakeholders and business environment over the years, however, there is there is a need to strike right balance to harmonize still ample scope for further improvement. Regulatory environmental stewardship with maintenance of 18 https://digitalregulation.org/3004297-2/ financial stability.17 19 https://www.bis.org/review/r231115f.pdf 20 https://www.rbi.org.in/Scripts/PublicationReportDetails. 17 https://www.bis.org/review/r231115f.pdf aspx?UrlPage=&ID=1306 24 RBI Bulletin August 2025Rethinking Regulations in an Interconnected Financial System SPEECH burden and compliance costs pose challenges to REs, broad principles for drafting, amending, and more so for smaller REs. Regulators not only need to reviewing regulations by the Reserve Bank. do a delicate balancing act of reducing the burden and e. The Reserve Bank is in the process of setting compliance cost for the REs but also need to ensure up a Regulatory Review Cell that would that it does not hinder the efficient functioning review all regulations every five to seven of markets. The Reserve Bank has pioneered some years. initiatives over time, which I would like to highlight: Data, capacity and resource constraints a. To reduce compliance burden, RBI had constituted a Regulatory Review Authority Another area which continues to engage the (RRA) in 1999, followed by establishment of attention of the regulators is the lack of precise data the second RRA (RRA 2.0) in 2021. The RRA to effectively formulate new policies. Rapid evolution 2.0 led to withdrawal or repeal of a total of of financial technologies has led to an exponential 1,673 circulars, and discontinuation/ online increase in the volume of data generated, however, conversion/ merger of 78 returns. challenges remain with respect to comprehensiveness, credibility, and accuracy of such information. Though b. The ‘Connect 2 Regulate’ Platform has been regulators are equipping themselves with the latest introduced on RBI’s website to broaden involvement of members of the public and tools and skills, the pace at which requirements are stakeholders in policy formulation and review, evolving is breath-taking. This requires continued thereby making the process more consultative. capacity building within the regulators. c. The ‘PRAVAAH’ (Platform for Regulatory Inter-Regulatory co-ordination Application, VAlidation and AutHorisation), As alluded to earlier, the Indian financial sector is a secure and centralised web-based portal for characterised by significant heterogeneity, comprising any individual or entity to seek authorisation, of varied players governed by multiple FSRs, each license or regulatory approval on any reference responsible for entities operating under its purview. made to the Reserve Bank has been launched This demands robust and effective inter-regulatory to enhance the efficiency of processes related co-ordination to facilitate consistent policy making. to granting of regulatory approvals. To address this challenge, an integrated approach d. To formalise participatory and responsive to oversight has been adopted by the Financial regulation making and demonstrating RBI’s Sector Regulators (FSRs) for financial conglomerates commitment to enhanced transparency and operating across multiple sectors, based on the ‘lead consultative approach a comprehensive regulator’ principle. Joint supervision and periodic Framework for the Formulation of Regulations bilateral/multilateral discussions with such financial was issued on May 7, 202521. It lays down conglomerates are some of the tools adopted as a part 21 The key processes include (a) public consultation through issuance of of this approach. a draft and a statement of particulars highlighting inter-alia the objective of the regulation, (b) impact analysis (to the extent feasible), (c) issuance The Financial Stability and Development Council of general statement of response to the public comments received, and (d) periodic review keeping in view aspects such as the stated objectives, (FSDC) headed by the Finance Minister and its Sub- experience gained, relevance in a changed environment, and the scope for reducing redundancies. Committee, headed by RBI Governor, where all RBI Bulletin August 2025 25SPEECH Rethinking Regulations in an Interconnected Financial System heads of FSRs are represented, provides a platform adoption of a forward-looking approach. Addressing for combined assessment of risks from the financial emerging risks calls for nuanced and adaptive strategies stability perspective and plays a pivotal role, for inter- to ensure resilience. Regulators must adopt a more regulatory co-ordination on the matters where there proactive mindset to help build a financial system is overlap among FSRs. Such platforms help in further that is both resilient and adaptable. Being proactive strengthening inter-regulatory co-ordination for wider entails embracing innovation and fully leveraging development of financial sector in India. data and technology. They need to further leverage technology to enhance their efficiency - both internal However, there could be certain areas, such as and supervisory, carry out regulatory horizon risk increasing partnerships between the technological scanning and boost regulatory effectiveness. Usage of firms and the REs, where activities may fall outside rapidly evolving technologies and collaboration with the remit of any of the FSRs, exposing the REs to risks domain experts is need of the hour for the regulators arising out of these activities. Addressing such risks, to stay abreast of the evolving changes in the financial many a times becomes challenging for regulators and system. requires effective co-ordination among international regulators/ supervisors so that they do not lead Regulatory Impact Assessments (RIAs) to a systemic crisis. This remains a complex area Regulatory Impact Assessments (RIA) are for regulators, given the concerns around privacy, increasingly being recognised as essential tools for confidentiality, and enforcement. policy makers, enabling the development of policies Way forward that are grounded in evidence, clear in their purpose, proportionate in design, and responsive to real world Principle and outcome-based approach conditions. These tools can be useful to strike a balance, There is no perfect regulatory approach, however, by guarding against both unnecessary compliance principle and outcome-based regulation is generally burden and regulatory gaps, while boosting public found to be more suitable for mature markets. confidence and enhancing international standing. Nevertheless, even developed economies use rule- Two essential elements of RIA are (i) Cost Benefit based framework when it comes to safeguarding Analysis of the regulations, which can be evaluated interests of consumers. We, at the Reserve Bank are either through qualitative or quantitative parameters gradually shifting towards principle and outcome- or through a mix of both and (ii) consultation with based regulations, as it gives operational flexibility to a broad spectrum of stakeholders. While the latter the REs for conduct of their operations and tailor their leads to enhanced transparency, fostering trust, and activities to their unique needs, while adhering to the improvement in the quality and effectiveness of the regulatory framework for delivering the outcomes regulations, the former helps determine the optimal expected from them. solution for addressing the problem while ensuring Forward looking and proactive approach efficient allocation of resources. Regulators are often confronted with complex Another important area is timely review of challenges while framing regulations, necessitating regulatory prescriptions and reporting mechanisms 26 RBI Bulletin August 2025Rethinking Regulations in an Interconnected Financial System SPEECH with a view to streamlining/ rationalising them and siloed, sector-specific regulations towards cross- making them more effective. Such timely reviews functional principle-based regulations. This co- not only reduce compliance requirements but also ordination will foster innovation and enable the REs offer the regulators an opportunity to review the to offer services across different domains as also appropriateness of regulations in line with evolving ensure that they have appropriate risk management market practices and developments. Regulators should protocols. This would also help in capping regulatory endeavour to adopt best practices in their regulatory arbitrage, while simultaneously reducing compliance approaches, both ex-ante, to assess potential impact requirements for the REs. Additionally, co-operation and avoid unintended consequences and ex-post, to among regulators across jurisdictions is essential for assess actual impact and support course correction sharing insights, expertise, and resources to enable while enhancing future rule design, so that together, more efficient regulation without compromising on they ensure that regulation is both “right the first quality.23 International standards serve as a valuable time” and “kept right over time”. reference point; however, they must be adapted to local contexts and conditions, as a 'one size fits all' Enhancing compliance approach is neither practical nor effective in today’s The regulators should have a broader vision of diverse regulatory landscape. enhancing compliance by REs to make it easier for Consumer centricity them to comply with regulations. This can be done by simplifying regulations, enhancing their clarity We need to consider the impact that regulations and removing redundancies and duplications. The can have on one of the most important stakeholders Reserve Bank has been emphasising on clarity in in financial system i.e., consumers. Regulators regulations and has started including examples, FAQs have remained conscious of the need to empower and illustrations as a part of its regulations for the consumers and safeguard their interests. To advance benefit of the REs. To provide a high-level overview this objective, they must think beyond conventional of the regulatory landscape and serve as a broad point approaches. Behavioral economics offers a powerful of reference for general understanding of the REs, the tool in this regard, providing valuable insights into Reserve Bank had come out with a Handbook titled consumer behavior and decision-making processes. It ‘Regulations at a Glance’22. Further, the Reserve Bank equips the regulators with an advanced set of policy is in the process of consolidating more than 8,000 instruments, most notably, behavioral nudges24, regulations issued by Department of Regulation, which can complement conventional regulatory under 30-35 thematic subjects. The regulators need frameworks by achieving the desired outcomes at to persist with such initiatives for enhancing the far lower compliance costs, thus presenting a more responsiveness of the REs and development of the efficient and socially beneficial policy alternative.25 financial sector. 23 International Regulatory Co-operation – Policy Brief by OECD April 2020 International and domestic regulatory co-operation 24 According to Thaler and Sunstein (2008, p. 6), a nudge is any aspect of the choice architecture that alters people’s behavior in a predictable way Given the cross sectoral operations of entities, without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and there is a need for the FSRs to move away from cheap to avoid. Nudges are not mandates. 25 https://behaviouraleconomics.pmc.gov.au/blog/more-nudges-value- 22 https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=59862 behavioural-economics-regulation RBI Bulletin August 2025 27SPEECH Rethinking Regulations in an Interconnected Financial System Conclusion balance is particularly important for India, given the immense size and heterogeneity of economy, growing Regulatory policy in the financial sector must aspirations, and substantial investment needs to strike an optimal balance between the critical need sustain high growth and development. The regulators for stability and objectives of fostering innovation, must consistently strive to achieve this equilibrium. efficiency, and competition. While it is necessary As Mahatma Gandhi said, “You may never know what to minimise systemic risks and protect consumers, results come of your actions, but if you do nothing, it should not discourage creativity, innovation, or there will be no result.” healthy market dynamics. On the other hand, an overemphasis on innovation and competition - Thank you once again for the opportunity to without adequate safeguards - can lead to financial share my thoughts with you. I wish all participants instability, resource misallocation, and ultimately an enriching and successful deliberations in the loss of confidence in the system. Finding this right programme. 28 RBI Bulletin August 2025From Vanji to Viksit Bharat: Banking on Trust, Technology, SPEECH and Transformation From Vanji to Viksit Bharat: Venkatarama Chettiar and Shri Athi Krishna Chettiar, came together to create a bank rooted in trust and Banking on Trust, Technology, community service. and Transformation* The founders travelled across the region, sometimes fording the Amaravati River in a coracle, Shri Swaminathan J. appealing to landholders and traders and offering their personal guarantees to reassure hesitant The Karur Vysya Bank family - represented here by the Chairperson, the Directors on the Board, the investors. Memories of financial failures like the shareholders, MD CEO, the staff, officials and the Arbuthnot crash2 were still fresh, and public trust customers of the bank and their families, ladies and in banking was fragile. Yet, the founders’ integrity gentlemen, Anaivarukkum Vanakkam. Namaskaram. and persistence won the day. KVB was formally A warm good afternoon. registered on June 22, 1916, with a paid-up capital of ₹1.20 lakh, exceeding their original target. Fittingly, It is both an honour and a privilege to join you the first shareholder was Goddess Gayathri Devi, here in Karur on the momentous occasion of KVB’s who continues to bestow her blessings on the bank 109th Foundation Day. I extend my sincere gratitude and its clientele. to Shri Ramesh Babu, the Managing Director and Chief Executive Officer for his kind invitation. The bank’s founding team embedded forward- Karur is a town where history, commerce, looking principles in its structure: they voluntarily and character are deeply intertwined. It is a place incorporated a clause prohibiting directors from celebrated in Sangam literature as ‘Karuvoor’ taking loans from the bank—a safeguard that only or ‘Vanji’—a thriving hub of poetry, trade, and became a statutory requirement decades later with craftsmanship, that served as the capital city of early the Banking Regulation Act of 1949. They also Chera kings. That spirit of enterprise and cultural envisaged employee participation in the bank’s pride lives on through institutions like KVB. future by allotting shares to staff—long before the idea of stock options became fashionable. Each Founding with Foresight1 manager was to hold 50 shares, officers 20 shares, Today is not just a ceremonial gathering to mark and cashiers, reflecting their key role, were to be the passage of time. It is a celebration of vision, allotted 40 shares. resolve, and quiet determination—a tribute to those What they began with prudence and purpose who chose to build a lasting institution in the face of has today grown into a ₹1.86 lakh crore institution, uncertainty. standing as a testament to their values, vision, and In 1916, as the First World War caused disruptions unshakeable trust in community enterprise. and hardship, two visionaries from Karur, Shri M.A. 2 The Arbuthnot crash of 1906 was one of colonial India’s most notorious * Address by Shri Swaminathan J, Deputy Governor, Reserve Bank of banking failures. Arbuthnot & Co., a leading British firm in Madras, India at the 109th Foundation Day of the Karur Vysya Bank on Friday, collapsed due to speculative mismanagement, triggering widespread July 25, 2025. panic. Thousands of depositors, including pensioners and officials, even 1 Based on material from Sriram, V, Karur Vysya Bank, Centenary the Governor of Madras, lost their savings. The episode severely eroded Book, https://www.kvb.co.in/docs/kvb-history-book-part1.pdf (accessed trust in foreign-run banks and inspired the founding of Indian Bank in July 20, 2025). 1907. RBI Bulletin August 2025 29SPEECH From Vanji to Viksit Bharat: Banking on Trust, Technology, and Transformation Banking for Viksit Bharat: Adapting with Purpose journey so far, and they will be critical in shaping and Agility its future. So let us reflect on each of these—not as philosophy, but as building blocks for a strong, agile, The 109th year of KVB comes at a time of profound and responsible banking institution. change in India’s economy and the broader financial system. As the nation moves towards the vision of Porul (Money/Resources): Using Strength with Viksit Bharat 2047, banks are being called upon not Discipline only to expand credit, but also to play a deeper role— In banking, resources are more than just financial supporting inclusive growth, maintaining financial capital. They include people, systems, institutional stability, and driving responsible innovation. memory, customer trust, and reputation. Sound I am sure KVB has already taken meaningful steps resource management is all about the quality of in this direction. But the journey ahead will demand decisions and the sustainability of outcomes. even greater agility, foresight, and commitment to It is not enough to meet regulatory thresholds purpose. or improve headline numbers. What matters is In thinking about how banks like KVB can how these financial resources are deployed— navigate the path ahead, I am reminded of a verse whether they support inclusive lending, long-term from the Thirukkural, which is a treasure trove of investment, or business models that promote trust timeless guidance for thoughtful action: and transparency. Every rupee must carry intent, “ப�ொருள் கருவிி கொலம் விின�-யிிடப�ொடு not just interest. ஐந்தும் இருள்தீீர எண்ணிிச் பெயில்” Equally important are the less tangible, but (Poruḷ karuvi kāalam viṉai-yiṭaṉodu aindhum no less critical, resources that do not reside on the iruḷtheera eṇṇi cheyal) balance sheet. These include the people who engage with customers every day, the internal controls that Literal meaning3: drive decisions and manage risk, and the institutional “Do an act after a due consideration of the values that shape internal culture. {following} five, viz., Money, means, time, A bank’s reputation, once established, becomes execution and place.” one of its most valuable assets. In an environment What the sage Thiruvalluvar tells us is this: of rising competition and evolving customer “The wise act only after reflecting on five things— expectations, the way forward lies in building upon a resources, tools, timing, action, and place or customer-centric approach that fosters trust, loyalty, context—to dispel any uncertainty and act with and long-term value. clarity.” Karuvi (Tools/Means): Staying Ahead with To my mind, this is not just classical wisdom—it Responsible Innovation is a practical framework, deeply relevant to modern banking. These five elements have shaped KVB’s The tools of banking have evolved rapidly—from passbooks and ledgers to core banking platforms, 3 Thirukural 675: English Translation and Commentary by Rev. Dr. G. U. Pope, Rev W. H. Drew, Rev. John Lazarus and Mr F. W. Ellis. Available mobile apps, real-time payment systems and artificial at Project Madurai. https://www.projectmadurai.org/pm_etexts/utf8/ pmuni0153.html intelligence. 30 RBI Bulletin August 2025From Vanji to Viksit Bharat: Banking on Trust, Technology, SPEECH and Transformation These tools define how services are delivered, an institution needs to change internally—when how decisions are made, and increasingly, how to modernise systems, when to refresh leadership, risks are managed. In this environment, a bank’s when to pause and consolidate, and when to take technological capabilities are no longer just bold steps forward. History rewards institutions that operational enablers; they have become strategic act early, rather than those that act perfectly. differentiators. The founders of KVB acted at such a moment. However, every tool comes with responsibility. Their decision to establish a bank in 1916, in the The speed and scale of digital adoption must midst of war and economic uncertainty, was bold, be matched by equally strong investments in timely, and rooted in the needs of the community. cybersecurity, data governance, and ethical The same sense of timing and responsiveness must safeguards. Recent global and domestic experiences now guide the bank as it enters its next phase. have shown that technology gaps, if not addressed Vinai (Action/Execution): Converting Thought into in time, can become points of systemic vulnerability. Execution – From the Boardroom to the Branch For banks looking to scale up responsibly, tools Strategy has little meaning, unless it is translated must be modern, agile, and continuously evolving. into action. For a bank, this means ensuring that More importantly, they must be well-governed. intent at the top is reflected in outcomes on the Technology must never outrun the organisation’s ground. Policies made in the boardroom must find capacity to manage it. Directors and senior meaningful expression at the branch. The strongest management must lead this conversation, ensuring frameworks—whether related to risk, credit, that risk, compliance, and internal audit functions technology, or compliance—are only as effective as have the resources and visibility needed to keep their execution at the customer interface. pace. Effective action requires clarity, coordination, Kaalam (Time/Timing): Knowing When to Act and accountability. Whether it is launching a new In banking, timing can be the difference between product, entering a new geography, or rolling out a breakthrough and missed opportunity, between a compliance reform, success depends on how resilience and regret. Whether it is extending credit, well goals are communicated, how clearly roles are entering new markets, or rebalancing portfolios, the defined, and how outcomes are tracked. ability to act at the right moment, and with the right However, driven by intense competitive judgment, is essential. pressures and a desire to project short-term success, Timing also requires contextual awareness. the management of certain banks and NBFCs appears Economic cycles, interest rate shifts, regulatory to believe that the ends justify the means. Practices changes, geopolitical developments, and even such as creative accounting, liberal interpretations climate events—all influence when and how of regulations, lenient policy frameworks, and decisions should be made. A delay in recognising an inadequate internal controls are being normalised early stress, or a rushed response to market signals, in some boardrooms—necessitating supervisory can have lasting consequences. intervention. Though such instances may be limited, But timing is not only about reacting to they risk eroding the public’s trust in the integrity of external events. It is also about recognising when the banking system. RBI Bulletin August 2025 31SPEECH From Vanji to Viksit Bharat: Banking on Trust, Technology, and Transformation Therefore, it is important to pursue growth with terrain in which they operate. For a bank with a rich systems, people, and processes that are aligned and heritage and legacy like KVB, the ability to balance rooted in ethical practices—from the boardroom to deep local insight with broader diversification will the branch. be key to navigating the next phase of growth. In this dynamic environment, staying true to its Idan / Idam (Context/Place): Understanding the community roots while embracing innovation and Terrain adaptability is what will truly define the “smart way Every institution operates within a broader to bank”4. environment—economic, social, technological, and Conclusion: Closing Thoughts for the Road Ahead geographic. The most resilient banks are those that remain deeply aware of their context and continually Let me return, in closing, to the words from adapt to it. Thirukkural that guided my reflections today. It KVB has long drawn strength from its community reminds us that lasting success is built not on chance roots. Its orientation towards semi-urban and rural or scale, but on careful thought and considered markets, and its close connection to the needs of action. Resources must be used with discipline. Tools local businesses and households, has shaped its must be modern and well-governed. Timing must be identity and customer relationships. informed by awareness. Action must translate intent into outcome. And context must guide judgment at However, context is never static. Changing every step. demographics, climate variability, digital access, migration patterns, and sectoral shifts are constantly In my address today, I have tried to compress reshaping the operating environment. As India my 37 years of experience—as a banker and, more progresses towards the goal of Viksit Bharat by 2047, recently, as a banking supervisor—into the timeless banks will be called upon to adapt continuously— framework provided by the sagacious Thiruvalluvar. to serve a more aspirational, mobile, and digitally His words speak not just to individual wisdom, but connected population. to institutional purpose. Geographic concentration can bring familiarity, In the 109 years since its founding, KVB has but it also introduces exposure. Regional slowdowns honoured these principles in many ways—quietly, and policy changes can affect concentrated portfolios steadily, and purposefully. But the road ahead will more acutely. Banks must continuously assess be more complex, more competitive, and more whether their branch network, sectoral mix, and demanding. The institutions that will lead in this credit exposure are aligned with the emerging environment are not those that move the fastest, but realities around them. those that move with clarity, with courage, and with conviction. Expanding into new markets or product segments brings promise, but this also calls for From the Reserve Bank’s perspective, we capacity-building—in terms of people, processes, expect banks like KVB to continue evolving— and local knowledge. setting benchmarks in governance and customer The most effective banks are those that service, empowering its assurance functions, and understand not only their own strengths, but also the 4 “Smart way to bank” is the tagline of Karur Vysya Bank. 32 RBI Bulletin August 2025From Vanji to Viksit Bharat: Banking on Trust, Technology, SPEECH and Transformation using technology not just for efficiency, but for My warmest congratulations to the entire KVB inclusion. Every Bank Board and management has family—past and present—on this remarkable a responsibility to deepen the hard-earned trust— milestone. May the future be built on innovation through service that is responsive, systems that are with prudence, growth with responsibility, and reliable, and leadership that is responsible. leadership with integrity. Nandri. Thank you and best wishes. Jai Hind!! RBI Bulletin August 2025 33ARTICLES State of the Economy Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 Equity Mutual Funds: Transforming India’s Savings Landscape EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States Horticultural Diversification: A Pathway to Agricultural ResilienceState of the Economy ARTICLE State of the Economy* global economic activity, aided by a strong expansion of the services sector, held up. Reflecting uncertain Continuing uncertainty on US trade policies shaped demand conditions, industrial metal prices remained the global macroeconomic environment during July and subdued, with crude oil prices exhibiting volatility on August. Domestic economic activity remained mixed geo-political developments and OPEC plus deciding across sectors in July. Timely progress of monsoon has to increase crude oil production. Inflation remained boosted kharif sowing. While industrial activity remained sticky across many advanced economies, leading subdued, manufacturing sector expanded, along with many central banks to pause on policy rates in July. services sector sustaining the growth momentum. Subsequently in August, growth concerns led some Headline inflation fell for the ninth consecutive month central banks to reduce their policy rates. in July. Financial conditions remained congenial and Global equity markets showed divergent trends. supportive of domestic economic activity. India’s sovereign The equity market rallies in the US and China rating upgrade by S&P bodes well for capital inflows and continued into August. While the Japanese equity sovereign yields, going forward. indices registered a significant jump following trade Introduction deals with the US, those for Europe moved rangebound. The US treasury yields edged up in July on fiscal debt Continuing uncertainty on US trade policies concerns. In August so far, yields exhibited a two- shaped the global macroeconomic environment way movement reacting to the weak employment during July and August. While the EU, South Korea numbers, lower than anticipated consumer price and Japan have entered into trade deals with the US, index (CPI) inflation, significant pick-up in wholesale steeper tariffs were levied on Brazil, Canada, India inflation and release of minutes of the July meeting of and Switzerland in August. In its July 2025 World the Federal Open Market Committee. Economic Outlook (WEO) update, the IMF highlighted that the risks to global growth outlook were tilted to Various high frequency indicators of domestic the downside notwithstanding the upward revision in economic activity showed a mixed trend in July, with global growth projections. goods and services tax (GST) e-way bills scaling a record high and GST collections registering a robust High frequency indicators for global growth, but electricity demand remained subdued. manufacturing activity returned to contractionary Demand in rural areas continued to show resilience. zone in July. As per the latest available information, Timely progress of southwest monsoon has helped the world trade volume also contracted. Nevertheless, boost kharif sowing. Industrial activity remained * This article has been prepared by Rekha Misra, Asish Thomas George, subdued in June, dragged down by mining and Shashi Kant, Rajni Dahiya, Biswajeet Mohanty, Shreya Kansal, Durga G, Aastha, Yamini Jhamb, Harendra Kumar Behera, Arjit Shivhare, Harshita electricity. Lead indicators for manufacturing and Yadav, Debapriya Saha, Radhika Singh, Sakshi Chauhan, Satyendra Kumar, Sarthak Gulati, Pratibha Kedia, Paras, Nilava Das, Arti Sinha, services activity showed sustained expansion in July. Hari Prasad E, Rajesh Kavediya, Pulastya Bandyopadhyay, Amit Pawar, Merchandise trade deficit widened in July 2025 due Yuvraj Kashyap, Monica, Dilpreet Sharma, Khushi Sinha, and Samridhi. The guidance and comments provided by Dr. Poonam Gupta, Deputy to higher oil deficit with non-oil deficit remaining Governor, is gratefully acknowledged. Peer review by G. V. Nadhanael, Binod Bihari Bhoi, and Soumya Suvra Bhadury is also acknowledged. steady. Uncertainty surrounding the India-US trade Views expressed in this article are those of the authors and do not represent the views of the Reserve Bank of India. deal persists. While the current exemptions from RBI Bulletin August 2025 35ARTICLE State of the Economy tariff alleviate the immediate impact, exports in some Domestic equity markets were negatively sectors may get negatively impacted. influenced by subdued corporate earnings and announcement of significantly higher US import Headline inflation fell for the ninth consecutive tariffs on Indian exports during July and early August, month in July and to its lowest level after June 2017, but revived thereafter amidst optimism surrounding as deflation in food accentuated and core inflation India’s sovereign credit rating upgrade and the (CPI excluding food and fuel inflation) softened. announcement of GST reforms. Steady inflows from Vegetable price deflation, in the wake of a muted domestic institutional investors, notably mutual seasonal uptick in prices and favourable base effects, funds, helped cushion the impact from net selling by drove food price dynamics. Other food subgroups foreign portfolio investors (FPIs). such as meat and fish, pulses, and spices continued to Gross inward foreign direct investment (FDI) record a deflation and cereals experienced a notable reached a four-year high in June. Even so, net FDI fall in inflation. The softening of core inflation inflows remained muted due to an increase in both was driven by a sharp moderation in the services repatriation of FDI and outward FDI. India’s external component. sector remained resilient with a modest current account deficit and forex reserves covering 11 months Overall financial conditions remained benign of imports. The S&P’s sovereign rating upgrade during July and August (till August 21). Amidst for India – underpinned by buoyant economic surplus liquidity, the weighted average call rate – growth, enhanced monetary policy credibility and the operating target of monetary policy – hovered in government’s commitment to fiscal consolidation the lower half of the corridor. Overnight rates in the – could potentially lead to a reduction in borrowing money market moved in tandem with the weighted costs, greater investor confidence and higher foreign average call rate. In the fixed income segment, 10-year capital inflows, going forward. G-sec yields hardened during mid-July to early August Set against this backdrop, the remainder of the amidst uncertainties over India-US trade negotiations article is structured into four sections. Section II and subsequent tariff imposition by the US. The S&P’s covers the rapidly evolving developments in the upgrade of India’s sovereign rating on August 14, 2025 global economy. Section III provides an assessment of domestic macroeconomic conditions. Section IV led to a brief easing.1 Thereafter, yields hardened encapsulates financial conditions in India, while during the third week of August. Section V presents the concluding observations. On the credit side, bank credit growth exhibited a II. Global Setting modest improvement in June 2025, driven by an uptick In July, the global macroeconomic environment in credit to micro, small and medium enterprises. was largely shaped by trade tariff announcements and The total flow of resources to the commercial sector the continuing uncertainties on US import tariffs rates registered an increase. Large corporates increasingly relating to some major economies and sectors. While met their funding requirements through market- the EU, South Korea and Japan have entered into trade based instruments such as commercial paper and deals with the US, steeper tariffs were levied on Brazil, corporate bonds. Canada, India and Switzerland in August (Chart II.1). 1 S&P Global Ratings has upgraded India’s long-term unsolicited sovereign In its July 2025 update of the World Economic credit rating to ‘BBB’ from ‘BBB-’, while also raising the short-term rating to ‘A-2’ from ‘A-3’. Outlook (WEO), the IMF revised its global GDP growth 36 RBI Bulletin August 2025State of the Economy ARTICLE Chart II.1: New Tariffs Announced by the US (In per cent) Notes: 1. Countries are ranked in the order of the tariff levied by the US on April 02, 2025. 2. August tariffs include import tariff announcements by US as well as the new tariffs post trade deals. Sources: The White House, and Reuters. forecasts for 2025 and 2026 upwards vis-à-vis its Table II.1: IMF’s GDP Growth Projections – April projections. Growth forecasts were increased Select AEs and EMDEs for advanced economies (AEs) by 0.1 percentage Projection for 2025 2026 points led by the US, the UK, and the Euro area, July April July April Month of Projection while growth of emerging market and developing 2025 2025 2025 2025 economies (EMDEs) was revised upwards by 0.4 World 3.0 2.8 3.1 3.0 Advanced Economies 1.5 1.4 1.6 1.5 percentage points, driven by stronger projections for US 1.9 1.8 2.0 1.7 China and India (Table II.1). Considering the lingering UK 1.2 1.1 1.4 1.4 uncertainties on US trade policy stance, the balance Euro area 1.0 0.8 1.2 1.2 of risks to global growth outlook was perceived to be Japan 0.7 0.6 0.5 0.6 tilted to the downside. Emerging Market and Developing 4.1 3.7 4.0 3.9 Economies Global uncertainty remained elevated in July Emerging and Developing Europe 1.8 2.1 2.2 2.1 on account of US tariff related uncertainty and geo- Russia 0.9 1.5 1.0 0.9 political tensions. The economic and trade policy Emerging and Developing Asia 5.1 4.5 4.7 4.6 uncertainty indices in the US have retreated from India# 6.4 6.2 6.4 6.3 their all-time high levels in April, but the pace of China 4.8 4.0 4.2 4.0 Latin America and the Caribbean 2.2 2.0 2.4 2.4 decline has moderated somewhat.2 Despite some Mexico 0.2 –0.3 1.4 1.4 2 Economic Policy Uncertainty (EPU) index measures the level of Brazil 2.3 2.0 2.1 2.0 uncertainty surrounding future economic policies, derived from the Middle East and North Africa 3.2 2.6 3.4 3.4 frequency of specific keywords like “economy,” “policy,” and “uncertainty” Sub-Saharan Africa 4.0 3.8 4.3 4.2 in major newspaper articles. Trade Policy Uncertainty Index measures the unpredictability of government trade policy decisions. World South Africa 1.0 1.0 1.3 1.3 Uncertainty Index (WUI) is computed by counting the percent of word Note: #: India’s data is on a fiscal year basis (April-March), while for all “uncertain” (or its variant) in the Economist Intelligence Unit country other countries it is for calendar years. reports. Source: IMF’s World Economic Outlook update, July 2025. RBI Bulletin August 2025 37ARTICLE State of the Economy Chart II.2: Global Uncertainty Indicators a. Uncertainty Indices b. Volatility Indices Index (Jan 2024=100), left scale; Index (Jan 2024=100), right scale Index (Jan 2025=100) 310 280 250 220 190 160 130 100 70 US Trade Policy Uncertainty Index US Economic Policy Uncertainty Index (RHS) US VIX EURO STOXX VIX World Uncertainty Index (RHS) Emerging Markets VIX Sources: Bloomberg; www.PolicyUncertainty.com; and World Uncertainty Index database. temporary pick-up in AEs in end July, financial market contractionary, indicating a deterioration in output volatility eased in August reflecting improved market as the impact of front-loading of production in sentiment (Chart II.2a and II.2b). anticipation of higher tariff receded and firms awaited clarity on trade policies (Table II.2). The global composite purchasing managers’ index (PMI) rose to a seven-month high in July, reflecting PMI readings in July remained in expansionary continued expansion in output and new business. zone for major AEs and EMDEs. Among major EMDEs, This was primarily driven by expansion in services, India continued to register strong expansion in business with the sector’s PMI rising to its highest level since activity. In contrast, Brazil and Russia continued to December 2024. Global manufacturing PMI turned contract (Chart II.3a). Major economies, including the Table II.2: Global Purchasing Managers’ Index Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 PMI composite 52.5 52.9 51.9 52.3 52.4 52.6 51.8 51.5 52.1 50.8 51.2 51.7 52.4 PMI manufacturing 49.7 49.6 48.7 49.4 50.1 49.6 50.1 50.6 50.3 49.8 49.5 50.4 49.7 PMI services 53.3 53.9 52.9 53.1 53.1 53.8 52.2 51.5 52.7 50.8 52.0 51.8 53.4 PMI export orders 49.7 49.0 48.5 48.9 49.3 48.7 49.6 49.7 50.1 47.5 48.0 49.1 48.5 PMI export orders: 49.4 48.4 47.5 48.3 48.6 48.2 49.4 49.6 50.1 47.3 48.0 49.2 48.2 manufacturing PMI export orders: 50.6 50.8 51.6 50.7 51.3 50.3 50.2 50.2 50.1 48.2 47.9 48.7 49.3 services <<<<<<Contraction---------------------------------------------------------------Expansion>>>>>> Notes: 1. The Purchasing Managers’ Index, a diffusion index, captures the change in each variable compared to the previous month, noting whether each has risen/improved, fallen/deteriorated or remained unchanged. A PMI value >50 denote expansion; <50 denote contraction; and =50 denote ‘no change’. 2. Heatmap is applied on data from April 2023 till July 2025. The map is colour coded–red denotes the lowest value, yellow denotes 50 (or the no change value), and green denotes the highest value in each of the PMI series. Source: S&P Global. 38 RBI Bulletin August 2025 52-naJ-2 52-naJ-32 52-beF-31 52-raM-6 52-raM-72 52-rpA-71 52-yaM-8 52-yaM-92 52-nuJ-91 52-luJ-01 52-luJ-13 52-guA-12 18000 480 16000 400 14000 12000 320 10000 240 8000 6000 160 4000 80 2000 0 0 42-naJ 42-beF 42-raM 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJState of the Economy ARTICLE US, China, Japan and Eurozone witnessed, in general, weak macro sentiment. Global food prices rose above a contraction in new export orders but India registered its two-year high, with an increase in the prices of a strong expansion (Chart II.3b). The global supply meat and vegetable oil, partially offset by cereals, dairy chain pressure index moderated to a level close to its and sugar (Chart II.4a).3 Crude oil prices stabilised historical average (Annex chart A1). since July as fears of broader conflict eased and OPEC Commodity prices remained broadly unchanged plus signalled potential supply increases in August. in July on the back of adequate supply of energy and Crude prices also moderated on account of weak Chart II.4: Commodity and Food Prices a. Commodity and Food Indices b. Gold - Copper - Brent Crude Oil Index (Jan 2024=100) Index (Jan 2025=100) 110 105 100 95 90 Food and Agriculture Organization Food Price Index Bloomberg Commodity Index World Bank Commodity Price Index Gold Copper Brent crude oil Sources: Food and Agriculture Organization; Bloomberg; and World Bank Pink Sheet. 3 As per the Food and Agriculture Organization’s Food Price Index for the month of July 2025. RBI Bulletin August 2025 39 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ 130 120 110 100 90 80 70 42-ceD-40 42-ceD-42 52-naJ-31 52-beF-20 52-beF-22 52-raM-41 52-rpA-30 52-rpA-32 52-yaM-31 52-nuJ-20 52-nuJ-22 52-luJ-21 52-guA-10 52-guA-12 Chart II.3: Purchasing Managers’ Index: Comparison across Jurisdictions a. S&P Global Composite PMI b. PMI Export Orders (Index) (Index) 64 60 56 52 48 44 40 Jul-25 Jun-25 Jul-25 Jun-25 Note: A level of 50 indicates no change in activity, while a reading above 50 signals expansion and below 50 suggests contraction. Source: S&P Global. aidnI SU niapS ailartsuA eropagniS labolG napaJ KU ylatI enozoruE anihC ynamreG adanaC ecnarF aissuR lizarB 58 56 54 52 50 48 46 44 42 40 aidnI aissuR niapS ynamreG ylatI enozoruE ailartsuA anihC setatS detinU napaJ modgniK detinU ecnarF adanaCARTICLE State of the Economy manufacturing activity in China and rising inventories Equity market movements in July-August tracked in the US. Gold prices remained broadly stable in the corporate earnings results and progress in trade July but inched higher in early August in the wake talks with the US, although uncertainty about the of bullion tariff uncertainty and rising expectation of economic outlook imparted volatility. The US equity policy rate cut by the US Fed. It moderated thereafter, markets increased for most of July, supported by aided by clarity on exemption of gold bullion from healthy corporate earnings in Q2:2025 and optimism import tariffs (Chart II.4a and 4b). about trade negotiations (Chart II.6a). Gains over the month were wiped out towards the end of July as CPI inflation in the US and Euro area remained weaker-than-expected US non-farm payroll data for stable in July. CPI inflation in the US remained steady July and substantial downward revision of the June at 2.7 per cent in July, though core inflation reached data weighed on market sentiments. Stoxx Europe a six-month high of 3.1 per cent. In the Euro area, 600 lost momentum amidst muted corporate earnings headline inflation held steady at 2.0 per cent marking in Europe. Though there was a pick-up following the the second consecutive month that inflation has European Union-US trade agreement, it was short- aligned with the European Central Bank’s official lived on account of lingering uncertainties on the target. Inflation in the UK rose to its highest level since real benefits of the deal for the European Union. In January 2024, while Japan’s inflation dropped to an contrast, equity indices in Japan registered sharp gains eight-month low (Chart II.5a). Among major EMDEs, following the trade deal with the US, and thereafter inflation softened in Brazil although remaining above on robust GDP growth for Q2 and strong corporate target. Deflationary pressure persists in China while results in August. Russia continued to grapple with inflation well above the target. South Africa’s annual inflation rate inched The US 10-year Treasury yields rose in July on up in July, marking the second consecutive monthly account of stronger-than-anticipated June inflation increase (Chart II.5b). print and growing uneasiness in markets with the Chart II.5: Headline Inflation a. Select AEs b. Select EMEs (Per cent) (Per cent) 4.0 3.8 3.5 3.1 3.0 2.7 2.5 2.0 2.0 1.5 1.0 Brazil Russia China US (CPI) UK Euro area Japan South Africa India Sources: Bloomberg; and OECD. 40 RBI Bulletin August 2025 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ 10 9 8.8 8 7 6 5 5.2 4 3.5 3 2 1.6 1 0 0.0 -1 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJState of the Economy ARTICLE Chart II.6: Global Financial Markets a. Equity Indices: Select Economies b. Government Bond Yields Index (April 07, 2025=100) (Per cent, left scale; index, right scale) 135 125 115 105 95 S&P 500 SSE Composite Index Nikkei 225 STOXX 600 US Govt Bonds J.P. Morgan EMBI Global Spread (RHS) Note: Equity markets are represented by S&P 500 for US, SSE Composite Index for Source: Bloomberg. China, Nikkei 225 for Japan and STOXX 600 for Europe. Source: Bloomberg. c. Currency Indices d. Portfolio Flows to EMEs (Index, left scale; Index, right scale) (US$ billion) MSCI EME currency index Dollar index (RHS) Debt Equity Total Source: Bloomberg. Source: Institute of International Finance. fiscal situation which reduced hopes of imminent financial conditions, and an uneven global recovery rate cuts. In August, yields experienced two-way contributed to heightened volatility in capital flows to movements. Though they fell initially owing to weaker emerging markets (Chart II.6d). than expected US jobs data and lower than anticipated Policy decisions by central banks’ continued to be CPI inflation, yields firmed up thereafter following a driven by the growth-inflation dynamics in respective higher-than-expected increase in the producer price jurisdictions amidst uncertainties surrounding global inflation. Yields eased following the release of the trade policies. Major advanced economies largely kept minutes of the July meeting of the Federal Open policy rates unchanged in July owing to sticky core and Market Committee (Chart II.6b). Risk premium on services inflation. In August, the UK, Australia and emerging market bonds declined in July and August New Zealand reduced their policy rates by 25 bps each on resilient macroeconomic fundamentals of several Sweden held its key policy rate steady amidst high economies, with a soft US dollar contributing further trade uncertainty. Amongst the EMDEs, Indonesia, to the spread compression. The US dollar remained intermittently volatile and subdued, reflecting shifting Mexico and Thailand also reduced key policy rates expectations around Fed policy, incoming macro data by 25 bps each in August. China held its benchmark and changing global risk perceptions (Chart II.6c). lending rate steady for the third consecutive month Concerns over the US fiscal dynamics, tighter global (Chart II.7). RBI Bulletin August 2025 41 52-rpA-3 52-rpA-31 52-rpA-32 52-yaM-3 52-yaM-31 52-yaM-32 52-nuJ-2 52-nuJ-21 52-nuJ-22 52-luJ-2 52-luJ-21 52-luJ-22 52-guA-1 52-guA-11 52-guA-12 355 4.7 335 4.5 315 4.3 4.3 295 264.5 4.1 275 3.9 255 52-naJ-20 52-naJ-32 52-beF-31 52-raM-60 52-raM-72 52-rpA-71 52-yaM-80 52-yaM-92 52-nuJ-91 52-luJ-01 52-luJ-13 52-guA-12 1,860 110 1,840 108 1,820 1831.2 106 1,800 104 1,780 102 1,760 1,740 98.6 100 1,720 98 1,700 96 52-naJ-20 52-naJ-32 52-beF-31 52-raM-60 52-raM-72 52-rpA-71 52-yaM-80 52-yaM-92 52-nuJ-91 52-luJ-01 52-luJ-13 52-guA-12 15 10 5 0.8 0 -2.6 -5 -3.3 -10 -15 52-naJ-3 52-naJ-42 52-beF-41 52-raM-7 52-raM-82 52-rpA-81 52-yaM-9 52-yaM-03 52-nuJ-02 52-luJ-11 52-guA-1 52-guA-22ARTICLE State of the Economy Chart II.7: Policy Rates Type Countries III. Domestic Developments incoming data and the evolving domestic growth- inflation dynamics, also unanimously decided to The Indian economy remained resilient amidst continue with the neutral stance while determining global uncertainties. Timely progress of southwest the appropriate monetary policy path. monsoon has helped increase kharif sowing. Growth in industrial sector remained uneven across segments Aggregate Demand in June, pulled down by electricity and mining. The high-frequency indicators for overall Manufacturing and services continued to expand in economic activity showed a mixed picture in July. GST July. Forward-looking surveys of consumer sentiments e-way bills touched a record high in July, led by pre- show improvement in consumer confidence for the festive inventory build-up and higher compliance. current period and improved optimism about the GST revenue picked-up and toll collections remained future (Annex chart A3). Headline inflation, driven steady, although electricity demand and petroleum by benign food prices and favourable base effects, is consumption recorded weakness in July. Digital likely to soften further and remain below the 4 per payments, a key indicator of overall economic cent target in Q2. In this context, the monetary policy activity, registered robust double-digit growth in committee unanimously voted to keep the repo rate both volume and value terms (Table III.1) unchanged at 5.5 per cent in its resolution of August During July, urban demand moderated with 6, 2025, considering the current macroeconomic domestic air passenger traffic weakening due to conditions, outlook and uncertainties, as well as the seasonal factors and runway maintenance. Retail sales ongoing transmission of the cumulative 100 bps rate of passenger vehicles also declined. Rural demand cut undertaken since February 2025. The monetary remained resilient supported by an uptick in real policy committee, while remaining vigilant on the wages. Retail tractor sales posted robust growth, aided 42 RBI Bulletin August 2025 22-naJ 32-naJ 42-naJ 52-naJ 52-luJ 5202.80.12 Australia 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Canada 0 0 0 1 0 1 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 -1 0 0 0 0 0 0 0 0 Euro area 0 0 0 0 0 0 1 0 1 0 1 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 0 0 0 0 0 0 0 0 0 0 Japan 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Advanced New Zealand 0 0 0 1 1 0 1 1 0 1 1 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 -1 0 0 -1 0 0 0 0 0 0 Economies South Korea 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sweden 0 0 0 0 0 0 1 0 1 0 1 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 0 0 0 0 0 0 0 0 Switzerland 0 0 0 0 0 1 0 0 1 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 0 0 0 0 0 0 0 United Kingdom 0 0 0 0 0 0 0 1 1 0 1 1 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 United States 0 0 0 0 1 1 1 0 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 0 0 0 0 0 0 0 0 0 0 Brazil 0 2 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 -1 -1 0 -1 -1 0 -1 -1 0 0 0 0 0 0 0 1 1 1 0 1 0 1 0 0 0 China 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 India 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 0 Indonesia 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Emerging Malaysia 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Market Mexico 0 1 1 0 1 1 0 1 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 -1 0 -1 -1 0 0 Economies Philippines 0 0 0 0 0 0 1 1 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Russia 0 12 0 -3 -6 -2 -2 0 0 -1 0 0 0 0 0 0 0 0 1 4 1 2 0 1 0 0 0 0 0 0 2 0 1 2 0 0 0 0 0 0 0 -1 -2 0 Saudi Arabia 0 0 0 0 1 1 1 0 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 0 0 0 0 0 0 0 0 0 0 0 South Africa 0 0 0 0 1 0 1 0 1 0 1 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Thailand 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rate Change < -0.75 -0.75 to -0.50 -0.50 to -0.25 -0.25 to 0 0 to 0.25 0.25 to 0.50 0.50 to 0.75 > 0.75 Source: Bloomberg.State of the Economy ARTICLE Table III.1: High Frequency Indicators-Economic Activity Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 GST e-way bills 19.2 12.9 18.5 16.9 16.3 17.6 23.1 14.7 20.2 23.4 18.9 19.3 25.8 GST revenue 10.3 10.0 6.5 8.9 8.5 7.3 12.3 9.1 9.9 12.6 16.4 6.2 7.5 Toll collection 9.4 6.8 6.5 7.9 11.9 9.8 14.8 18.7 11.9 16.6 16.4 15.5 14.8 Electricity demand 4.0 -5.0 -0.8 -0.4 3.7 5.1 1.3 2.4 5.7 2.8 -4.8 -2.3 2.0 Petroleum consumption 10.7 -3.1 -4.4 4.1 10.6 2.0 3.0 -5.2 -3.1 0.2 0.7 1.4 -4.0 Of which Petrol 10.5 8.6 3.0 8.7 9.6 11.1 6.7 5.0 5.7 5.0 9.2 6.8 5.9 Diesel 4.5 -2.5 -1.9 0.1 8.5 5.9 4.2 -1.3 0.9 4.2 2.1 1.5 2.4 Aviation turbine fuel 9.6 8.1 10.4 9.4 8.5 8.7 9.4 4.2 5.7 3.9 4.3 3.3 -2.3 Digital payments- volume 36.7 34.9 36.3 40.3 30.1 33.1 33.0 26.7 30.8 30.0 29.2 28.3 29.0 Digital payments- value 22.1 16.7 21.5 27.5 9.5 19.6 18.6 9.5 17.3 18.4 12.6 17.4 16.9 <<Contraction -------------------------------------------------------------------------------- Expansion>> Notes: 1. The y-o-y growth (in per cent) has been calculated for all indicators. 2. The heatmap is applied on data from April 2023 till July 2025. 3. The heatmap translates the data range for each indicator into a colour gradient scheme with red denoting the lowest values and green corresponding to the highest values of the respective data series. For digital payments data, zero growth is taken as the lower bound. Sources: Goods and Services Tax Network (GSTN); RBI; Central Electricity Authority (CEA); and Ministry of Petroleum and Natural Gas, GoI. by a favourable monsoon. Two-wheeler retail sales 5.2 per cent, led by decline in rural unemployment. declined due to kharif sowing operations and heavy The labour force participation rate and worker rains. Sales are expected to pick up in the upcoming population ratio edged up in both rural and urban areas.4 Job creation in organised sector remained festive season. Household demand for employment strong as reflected in record net pay roll additions under the Mahatma Gandhi National Rural under Employees’ Provident Fund Organization in Employment Guarantee Scheme (MGNREGS) declined June. Growth in white-collar job listings, as per the in July as kharif sowing picked up (Table III.2). Naukri JobSpeak index, was led by travel/hospitality, Employment conditions remained resilient in insurance, and education in July. PMI employment July. The all-India unemployment rate declined to indices for both manufacturing and services Table III.2: High Frequency Indicators-Rural and Urban Demand Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Urban Domestic air passenger traffic 7.6 6.7 7.4 9.6 13.8 10.8 14.1 12.1 9.9 9.7 2.6 3.7 -2.1 demand Retail passenger vehicle sales 14.0 -4.5 -18.8 32.4 -13.7 -2.0 15.5 -10.3 6.3 1.6 -3.1 2.5 -0.8 Retail tractor sales -12.0 -11.4 14.7 3.1 29.9 25.8 5.2 -14.5 -5.7 7.6 2.8 8.7 11.0 Rural MGNREGA work demand -19.5 -16.0 -13.4 -7.6 3.9 8.2 14.4 2.8 2.2 -6.5 4.4 4.4 -12.3 demand Retail two-wheeler sales 17.7 6.3 -8.5 36.3 15.8 -17.6 4.2 -6.3 -1.8 2.3 7.3 4.7 -6.5 <<Contraction -------------------------------------------------------------------------------- Expansion>> Notes: 1. The y-o-y growth (in per cent) has been calculated for all indicators. 2. The heatmap is applied on data from April 2023 till July 2025. 3. The heatmap translates the data range for each indicator into a colour gradient scheme with red denoting the lowest values and green corresponding to the highest values of the respective data series. 4. The data on domestic air passenger traffic for July 2025 growth rate is calculated by aggregating daily data. Sources: Airports Authority of India; Federation of Automobile Dealers Associations (FADA); and Ministry of Rural Development, GoI. 4 PLFS July 2025 Monthly Bulletin released on August 18, 2025. RBI Bulletin August 2025 43ARTICLE State of the Economy Table III.3: High Frequency Indicators- Employment Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Unemployment rate (PLFS: All-India) 5.1 5.6 5.6 5.2 Unemployment rate (PLFS: Rural) 4.5 5.1 4.9 4.4 Unemployment rate (PLFS:Urban) 6.5 6.9 7.1 7.2 Naukri JobSpeak Index 11.8 -3.4 6.0 10.0 2.0 8.7 3.9 4.0 -1.5 8.9 0.3 10.5 6.8 PMI Employment: Manufacturing 53.7 53.5 52.1 53.3 52.9 53.4 54.8 54.5 53.4 54.2 54.9 55.1 53.3 PMI Employment: Services 53.5 53.1 53.4 54.3 56.6 55.5 56.3 56.2 52.5 53.9 57.1 55.1 51.4 <<Contraction -------------------------------------------------------------------------------- Expansion>> Notes: 1. All PLFS indicators are in the current weekly status and for people aged 15 years and above. 2. The y-o-y growth (in per cent) has been calculated for Naukri index. 3. The heatmap is applied on data from April 2023 till July 2025. 4. The heatmap translates the data range for each indicator into a colour gradient scheme with red denoting the lowest values and green corresponding to the highest values of the respective data series. 5. All PMI values are reported in index form. A PMI value >50 denotes expansion, <50 denotes contraction and =50 denotes ‘no change’. In the PMI heatmaps, red denotes the lowest value, yellow denotes 50 (or the no change value), and green denotes the highest value in each of the PMI series. Sources: Ministry of Statistics and Program Implementation (MoSPI), GoI; Info Edge; and S&P Global. expanded in July, albeit at a slower pace than in June Q1 of last year (Chart III.1a).5 This was on account (Table III.3). of larger capital and revenue expenditure, and lower net tax revenue.6 On account of front-loading of capital The gross fiscal deficit of the union government expenditure, 24.5 per cent of the budgetary target was for Q1:2025-26, as proportion of budget estimates completed in Q1.7 for the financial year, was higher as compared with Chart III.1: Major Fiscal Indicators (Up to end-June) a. Union Government b. State Governments (Actuals for Q1 as per cent of budget estimates for the (cid:8)inancial year) (Actuals for Q1 as a per cent of budget estimates for the (cid:8)inancial year) 20 17.9 45 40.0 10 6.4 8.4 40 35 0 30 -10 -7.0 25 -20 20 15 14.2 -30 -28.5 10.4 9.8 10 8.3 -36.0 -40 5 0.3 -50 0 Revenue Gross fiscal Primary Revenue Gross fiscal Primary deficit deficit deficit deficit deficit deficit 2024-25 2025-26 2024-25 2025-26 Notes: 1. Negative revenue deficit and primary deficit numbers, as per cent of budget estimates indicate revenue surplus and primary surplus, respectively. 2. In Chart III.1b, data pertains to 24 States/UTs. Sources: Controller General of Accounts; and Comptroller and Auditor General of India. 5 As per the latest data released by the Controller General of Accounts. 6 Due to lower direct tax collections. Indirect taxes, however, grew by 11.3 per cent, primarily led by higher growth in GST collections. 7 16.3 per cent of the budgeted target for capital expenditure was attained in Q1:2024-25. 44 RBI Bulletin August 2025State of the Economy ARTICLE Gross fiscal deficit of states in Q1:2025-26, as jewellery, drugs and pharmaceuticals, and organic and proportion of budget estimates for the financial inorganic chemicals performed well while petroleum year, was also higher vis-a-vis Q1 of last year. This products, iron ore, and oil meals contributed was on account of higher spending as well as lower negatively. revenue receipts (Chart III.1b). Lower revenue receipts Merchandise imports also expanded after resulted from slowdown in growth of states’ goods and declining in the previous two months (Annex chart services tax collections. Non-GST revenue streams such A5).10 Electronic goods, petroleum crude and products, as state excise duties, stamp duties, and registration fertilisers, crude and manufactured, machinery, fees remained robust. On the expenditure side, both electrical and non-electrical, and gold supported revenue and capital expenditure were strong. import growth during the month while, coal, coke and briquettes, pulses, and leather and leather products Trade dragged overall imports down. Merchandise trade deficit widened to US$ 27.3 Services trade remained robust despite billion in July 2025 from US$ 24.8 billion a year ago challenging global trade scenario. In June 2025, net due to higher oil deficit (Chart III.2). The share of oil services export earnings increased by 19.8 per cent in total trade deficit increased as compared to a year (y-o-y) to US$ 16.2 billion. Services exports grew ago.8 Non-oil deficit remained roughly the same at at a fast pace, underscoring the sustained strength US$ 16.1 billion. of India’s services sector. At the same time, Merchandise exports expanded after declining imports also rose rapidly, reflecting a rise in software in the previous two months (Annex chart A4).9 services and transportation services imports Engineering goods, electronic goods, gems and (Chart III.3).11 Chart III.2: Merchandise Trade Deficit (Per cent, y-o-y, left scale; US$ billion, right scale) 30 30 20 20 8.6 10 10 7.3 0 0 -10 -10 -20 -20 -30 -30 -40 -40 Trade balance (RHS) Exports Imports Sources: PIB; DGCI&S; and RBI staff estimates. 8 Oil trade deficit increased to US$ 11.2 billion in July from US$ 8.7 billion a year ago. Oil’s share in total trade deficit increased to 41.1 per cent in July from 35.1 per cent a year ago. 9 US$ 37.2 billion in July [growth of 7.3 per cent (y-o-y)] 10 US$ 64.6 billion in July [growth of 8.6 per cent (y-o-y)] 11 Services exports and imports increased to US$ 32.1 billion and US$ 15.9 billion, respectively in June 2025. RBI Bulletin August 2025 45 32-luJ 32-guA 32-peS 32-tcO 32-voN 32-ceD 42-naJ 42-beF 42-raM 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJARTICLE State of the Economy Chart III.3: Trend in Services Exports and Imports (Per cent, y-o-y) 30 25 20 15 12.0 10 5 5.0 0 -5 -10 -15 Exports Imports Source: RBI. Aggregate Supply pulses, witnessed a decline as farmers shifted to more Agriculture lucrative crops such as maize.13 Timely progress of the southwest monsoon has The cumulative rainfall during June 1 - August helped increase kharif sowing (Chart III.4).12 The 22, 2025 at the all-India level stands 2 per cent above increase in sown area was mainly in rice and maize, normal. Reservoir levels stood well above the previous while the area under oilseeds and cotton declined. year and the decadal average (Chart III.5). Tur, which accounts for 35 per cent of area under The combined public stock of rice and wheat remained comfortable supported by strong procurement.14 Industry and Services Q1:2025-26 Results for Listed Companies Results of listed non-government non-financial companies15 for Q1:2025-26 indicated a subdued performance in the corporate sector. Sales growth of listed private manufacturing companies moderated further primarily due to a slowdown in petroleum industry, automobiles, electrical machinery, and food products.16 Following a period of steady improvement, sales growth of IT firms also declined during Q1, reflecting the impact of global headwinds. Sales 12 Kharif sowing was at 1074 lakh hectares, covering around 97.9 per cent of the normal area as on August 22, 2025. 13 Sown area of tur declined by 1.8 per cent, while that of maize rose by 11.7 per cent as compared to the previous year. 14 As on August 01, 2025, public stock was 2.1 times the buffer norm 15 Based on quarterly results of 3,079 listed non-government non-financial companies. 16 Aggregate sales growth moderated to 5.5 per cent (y-o-y) during Q1:2025-26, down from 7.1 per cent in the previous quarter. 46 RBI Bulletin August 2025 32-nuJ 32-luJ 32-guA 32-peS 32-tcO 32-voN 32-ceD 42-naJ 42-beF 42-raM 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ Chart III.4: Kharif Sown Area (Lakh hectares, left scale; per cent, right scale) 450 120 400 100 350 300 80 250 60 200 150 40 100 20 50 0 0 2024-25 2025-26 Per cent of full season normal area (RHS) Note: Data is as on August 22, 2025 Source: Ministry of Agriculture and Farmers’ Welfare. eciR sesluP esraoC slaerec sdeesliO enacraguS nottoCState of the Economy ARTICLE Chart III.5: Reservoir Storage Chart III.6: Sales Growth of Listed Private (Per cent of full reservoir level) Non-Financial Companies 90 (Y-o-y, Per cent) 60 80 78 72 70 65 40 60 50 40 20 30 7.5 6.0 5.3 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 10 2022-23 2023-24 2024-25 2025- 26 0 Northern Eastern Western Central Southern All India Manufacturing IT Services (Non-IT) Last 10 years average 2024-25 2025-26 Note: Data is based on results of 3,079 listed non-government non-financial Note: Data is as on August 21, 2025. companies (1,736 manufacturing, 198 IT, and 892 non-IT services). Source: Central Water Commission. Sources: Capitaline database; and RBI staff estimates. growth of non-IT services companies also moderated During Q1:2025-26, listed Indian banking and (Chart III.6). financial sector companies17 underwent a moderation Despite subdued sales growth, the operating in both revenue and net profit growth (Chart III.8). profits and margins remained stable for manufacturing Revenue continued to expand but at a slower pace. and services companies during Q1:2025-26 on account Costs rose on account of sequential increase in salary of slower increase in expenses (Chart III.7a & III.7b). and wage expenses. Higher provisioning costs and Chart III.7: Profitability of Listed Private Non-Financial Companies a. Operating Profit Growth b. Operating Profit Margin (Per cent, y-o-y) (Per cent) 20 26 18.4 24 22.7 15 22 21.6 20 11.3 10 18 8.1 6.9 16 5.4 14.7 14 5 2.4 12 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Manufacturing IT Services 2022-23 2023-24 2024-25 2025- (Non-IT) 26 Q4:2024-25 Q1:2025-26 Manufacturing IT Services (Non-IT) Note: Data is based on results of 3,079 listed non-government non-financial companies (1,736 manufacturing, 198 IT, and 892 non-IT services). Sources: Capitaline database; and RBI staff estimates. 17 Based on a sample of 349 companies constituting around 84 per cent of the total market capitalisation of listed banking and financial sector companies. RBI Bulletin August 2025 47ARTICLE State of the Economy Chart III.8: Performance of Listed Chart III.9: Private Corporates’ Financial Companies Investment Intentions (Y-o-y growth in per cent) (₹ crore) 25 1,40,000 1,20,000 20 1,00,000 91,501 16.2 80,000 15 60,000 10.9 10 40,000 8.7 7.2 20,000 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022-23 2023-24 2024-25 (P) 2025 0 -26 (P) Revenues Expenditure Operating profits Net profits Total cost of projects sanctioned by banks/FIs ECBs/ IPOs (only capex) Sep-24 Dec-24 Mar-25 Jun-25 Note: Data for 2024-25 and Q1:2025-26 are provisional. Sources: CMIE Prowess; and RBI staff estimates. Sources: Data on project finance gathered from banks/FIs; and RBI staff estimates. deterioration in asset quality of some companies with four out of the eight sectors contracting, although contributed to slower growth of net profits relative to steel and cement industries performed well. operating profits. Available high-frequency indicators for July point to expansion in manufacturing activity, with On the investment front, the total cost of capex its PMI surging to a 16-month high. Automobile projects sanctioned by select banks and financial production recorded its fastest growth in a year, led institutions during Q1:2025-26 recorded a modest by strong output of three-wheelers and two-wheelers. increase over the previous quarter. About 66 per cent Conventional electricity generation remained subdued of intended investment was concentrated in power, for the fourth consecutive month, driven by early rains construction and IT software industries. Funds raised and softer industrial output. In contrast, renewable through external commercial borrowings and initial energy generation sustained its pace. Import of capital public offering for capex purposes were slightly goods rebounded in July (Table III.4). Supply chain lower than in the previous quarter. Overall, fund pressures inched up in July 2025 but stayed below mobilisation for capex by private corporates through their historical average levels (Annex chart A6). various channels indicated stable investment activity despite heightened uncertainties (Chart III.9). India has emerged as the third-largest country in terms of solar power generation – a significant Monthly Indicators of Industrial Activity milestone in its pursuit of an energy-secure future.18 Growth in industrial activity, as measured by the India’s installed solar power capacity has increased year-on-year change in Index of Industrial Production sharply in recent years (Chart III.10). Moreover, (IIP), eased to a ten-month low in June 2025. While as a measure of accelerated e-mobility in India, the mining and electricity continued to experience PM Electric Drive Revolution in Innovative Vehicle contraction, manufacturing expanded. In July, growth 18 International Renewable Energy Agency (IRENA). Renewable Energy in index of eight core industries remained subdued Statistics, July 2025. 48 RBI Bulletin August 2025State of the Economy ARTICLE Table III.4: High Frequency Indicators- Industry Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 IIP headline 5.0 0.0 3.2 3.7 5.0 3.7 5.2 2.7 3.9 2.6 1.9 1.5 IIP manufacturing 4.7 1.2 4.0 4.4 5.5 3.7 5.8 2.8 4.0 3.1 3.2 3.9 IIP capital goods 11.7 0.0 3.5 2.9 8.9 10.5 10.2 8.2 3.6 14.0 13.3 3.5 PMI manufacturing 58.1 57.5 56.5 57.5 56.5 56.4 57.7 56.3 58.1 58.2 57.6 58.4 59.1 PMI export orders 57.2 54.4 52.9 53.6 54.6 54.7 58.6 56.3 54.9 57.6 56.9 60.6 57.3 PMI manufacturing: future output 64.1 62.1 61.6 62.1 65.5 62.5 65.1 64.9 64.4 64.6 63.1 62.2 57.6 Index of eight core industries 6.3 -1.5 2.4 3.8 5.8 5.1 5.1 3.4 4.5 1.0 1.2 2.2 2.0 Electricity generation: conventional 6.8 -3.8 -1.3 0.5 2.7 4.5 -1.3 2.4 4.8 -1.8 -8.2 -6.1 -0.9 Electricity generation: renewable 14.2 -3.7 12.5 14.9 19.0 17.9 31.9 12.2 25.2 28.0 18.2 28.7 Automobile production 16.8 4.4 10.1 10.0 8.0 1.3 9.4 2.3 6.5 -1.7 5.2 1.2 10.7 Passenger vehicle production 1.2 0.7 -3.4 -4.0 6.5 9.2 3.7 4.5 11.2 10.8 5.4 -1.8 0.1 Tractor production 8.1 -1.0 2.7 0.4 24.7 20.9 23.7 -7.8 18.5 20.5 9.1 9.8 11.5 Two-wheelers production 21.1 4.9 12.9 13.3 8.8 -0.6 10.3 1.6 5.6 -4.1 4.7 1.4 12.3 Three-wheelers production 6.0 9.0 3.9 -6.7 -5.5 7.6 16.2 6.5 6.0 4.1 16.9 8.6 24.0 Crude steel production 6.8 2.6 0.3 4.2 4.5 8.3 7.4 6.0 8.5 9.3 11.0 12.6 14.0 Finished steel production 6.9 2.7 0.7 4.0 2.8 5.3 6.7 6.7 10.0 6.6 7.0 10.9 13.8 Import of capital goods 11.6 12.3 10.9 7.0 4.7 6.1 15.5 -0.5 8.6 21.5 14.3 2.6 12.2 <<Contraction -------------------------------------------------------------------------------- Expansion>> Notes: 1. The y-o-y growth (in per cent) has been calculated for all indicators (except for PMI). 2. The heatmap translates the data range for each indicator into a colour gradient scheme with red denoting the lowest values and green corre- sponding to the highest values of the respective data series. 3. The heatmap is applied on data from April 2023 till July 2025, other than for IIP, and electricity generation: renewable, where the data are till June 2025. 4. All PMI values are reported in index form. A PMI value >50 denotes expansion, <50 denotes contraction and =50 denotes ‘no change’. In the PMI heatmaps, red denotes the lowest value, yellow denotes 50 (or the no change value), and green denotes the highest value in each of the PMI series. Sources: Ministry of Statistics and Programme Implementation (MoSPI); S&P Global; Central Electricity Authority (CEA), Ministry of Power; Society of Indian Automobile Manufacturers (SIAM); Office of Economic Adviser, GoI; Joint Plant Committee; Directorate General of Commercial Intelligence & Sta- tistics; and Tractor and Mechanisation Association. Enhancement (PM E-DRIVE) Scheme has been Chart III.10: Solar Energy Capacity extended by two years till March 31, 2028. (Gigawatts) 120 119.02 Monthly Indicators of Services Activity India’s services sector sustained its growth 100 97.9 momentum in July, with PMI services recording 80 the highest expansion in 11 months, driven by 73.3 new orders and output on the back of strong 63.3 60 domestic and international demand. International 49.3 air passenger traffic remained firm while retail 40 37.5 33.7 commercial vehicles segment expanded. Port traffic 25.2 20 rose for the eighth consecutive month led by higher growth in fertilisers, petroleum, oil and lubricants, 0 and containerised cargo. Growth in construction 2018 2019 2020 2021 2022 2023 2024 2025* sector indicators – steel consumption and cement Note: *: Capacity as of July 2025. Source: Central Electricity Authority (CEA). production – remained robust (Table III.5). RBI Bulletin August 2025 49ARTICLE State of the Economy Table III.5: High Frequency Indicators- Services Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 PMI services 60.3 60.9 57.7 58.5 58.4 59.3 56.5 59.0 58.5 58.7 58.8 60.4 60.5 International air passenger traffic 8.8 11.1 11.2 10.3 10.7 9.0 11.1 7.7 6.8 13.0 5.0 3.4 5.4 Domestic air cargo 8.8 0.6 14.0 8.9 0.3 4.3 6.9 -2.5 4.9 16.6 2.3 2.6 International air cargo 24.4 20.7 20.5 18.4 16.1 10.5 7.1 -6.3 3.3 8.6 6.8 -1.2 Port cargo traffic 5.9 6.7 5.8 -3.4 -5.0 3.4 7.6 3.6 13.3 7.0 4.3 5.6 4.0 Retail commercial vehicle sales 5.9 -6.0 -10.4 6.4 -6.1 -5.2 8.2 -8.6 2.7 -1.0 -3.7 6.6 0.2 Hotel occupancy 3.6 0.7 2.1 -5.3 11.1 -0.2 1.2 0.6 1.9 7.2 -2.8 -0.3 Tourist arrivals -1.3 -4.2 0.4 -1.4 -0.1 -6.6 -0.2 -8.6 -13.7 -3.8 Steel consumption 14.6 9.1 11.8 8.9 9.5 5.2 10.9 10.9 13.6 6.0 8.1 9.3 7.3 Cement production 5.1 -2.5 7.6 3.1 13.1 10.3 14.3 10.7 12.2 6.3 9.7 8.2 11.7 <<Contraction -------------------------------------------------------------------------------- Expansion>> Notes: 1. The y-o-y growth (in per cent) has been calculated for all indicators (except for PMI). 2. The heatmap translates the data range for each indicator into a colour gradient scheme with red denoting the lowest values and green corresponding to the highest values of the respective data series. 3. The heatmap is applied on data from April 2023 till July 2025, other than for domestic and international air cargo, and hotel occupancy, where the data are till June 2025. The latest data for tourist arrivals is till April 2025. 4. The data on international air passenger traffic for July 2025 growth rate is calculated by aggregating daily data. 5. All PMI values are reported in index form. A PMI value >50 denotes expansion, <50 denotes contraction and =50 denotes ‘no change’. In the PMI heatmaps, red denotes the lowest value, yellow denotes 50 (or the no change value), and green denotes the highest value in each of the PMI series. Sources: Federation of Automobile Dealers Associations (FADA); Indian Ports Association; Airports Authority of India; HVS Anarock; Ministry of Tourism, GoI; Joint Plant Committee; Office of Economic Adviser; and S&P Global. Inflation a softening of core inflation (CPI excluding food and fuel).19 The all-India CPI inflation was at 1.6 per cent in Headline inflation declined for the ninth consecutive month in July, reaching its lowest level July 2025 as against 2.1 per cent in June (Chart III.11). since June 2017, driven by deeper food deflation and Strong favourable base effects, which were partly Chart III.11: Trends and Drivers of CPI Inflation a. CPI Inflation b. Contribution to Inflation (Y-o-y, per cent) (Contribution in percentage points) 12 10 8 6 4 3.9 2.7 2 1.6 0 -2 -0.8 -4 -6 Food and beverages CPI excluding food and fuel Fuel and light CPI headline Sources: NSO; and RBI staff estimates. 19 As per the provisional data released by the National Statistical Office (NSO) on August 12, 2025. 50 RBI Bulletin August 2025 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ 8 7 6 5 4 3 2 1.6 1 0 -1 Food and beverages CPI excluding food and fuel Fuel and light CPI headline (y-o-y, per cent) 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJState of the Economy ARTICLE confectionery moderated, while that in oils and fats, Chart III.12: CPI Headline: Momentum non-alcoholic beverages, fruits, and prepared meals and Base Effect (Percentage points) edged up (Chart III.13). 3 Fuel and light inflation inched up in July with 2 inflation remaining elevated for LPG while moderating 0.9 for electricity.21 Kerosene prices continued to record 1 deflation, though at a slower pace. 0 Core inflation eased to 3.9 per cent in July 2025 -1 -0.5 from 4.4 per cent in June. The decline in inflation was mostly driven by transport and communication -2 -1.5 and education sub-groups, while inflation in health and personal care and effects inched up. Clothing and M-o-m change Base effect footwear recorded a marginally lower inflation, while Monthly change in y-o-y inflation that in pan, tobacco and intoxicants, household goods Sources: NSO; and RBI staff estimates. and services, and housing remained unchanged. offset by a positive price momentum, also contributed Both rural and urban inflation eased further to to the fall in headline inflation (Chart III.12). 1.2 per cent and 2.0 per cent, respectively, in July. Food inflation dipped to its lowest level in 78 While state-level inflation rates varied between months driven by a deflation in vegetables, pulses, (-) 0.61 per cent and 8.89 per cent, majority of the spices, and meat and fish sub-groups.20 Inflation states experienced inflation of less than 2 per cent in cereals, eggs, milk and products, sugar and (Chart III.14). 20 Food inflation was (-)0.8 per cent (y-o-y) in July. 21 Inflation in fuel and light subgroup was 2.7 per cent in July. RBI Bulletin August 2025 51 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ Chart III.13: Annual Inflation across Sub-groups (Y-o-y, per cent) Sources: NSO; and RBI staff estimates.ARTICLE State of the Economy High-frequency food price data for August so far (up to 22nd) indicate a pick-up in cereal prices. Pulses recorded a mixed trend, with a decline in tur/arhar dal prices, and an increase in gram dal price. Among edible oils, prices firmed up for mustard, sunflower, groundnut and soybean oils, while palm oil prices remained steady. Among key vegetables, tomato prices continued to increase. The prices of potatoes and onions remained steady (Chart III.15). Retail selling prices of petrol and diesel remained unchanged in August. Kerosene prices firmed up while LPG prices remained unchanged (Table III.6). The PMIs for July recorded a sequential pick-up in the rate of expansion of input prices for manufacturing and services. Selling prices also accelerated for both services and manufacturing firms (Annex chart A7). Chart III.15: Prices of Essential Commodity a. Cereals b. Pulses Index (Jan 2024 = 100) Index (Jan 2024 = 100) 115 110 105 103.9 100 95 99.6 90 Wheat Rice c. Vegetables d. Edible Oils Index (Jan 2024 = 100) Index (Jan 2024 = 100) Sources: Department of Consumer Affairs, GoI; and RBI staff estimates. 52 RBI Bulletin August 2025 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 52-guA 115 105.9 105 95 95.2 85 78.1 75 Gram dal Tur/ Arhar dal Moong dal Potato Onion Tomato Mustard oil Sunflower oil Groundnut oil 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 52-guA 130 120 110 100 90 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 52-guA 250 128.7 200 175.1 150 119.7 100 117.6 50 76.4 100.8 0 42-beF 42-raM 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ 52-guA Chart III.14: Spatial Distribution of Inflation: July 2025 (CPI-Combined) (Y-o-y, per cent) <2 2-4 4-6 6-8 8-10 Inflation Number of Inflation Number of Range States/UTs Trend States/UTs <2 20 Decline 32 2-4 14 Stable 0 4-6 1 Increase 5 6-8 1 8-10 1 Note: Map is for illustrative purposes only. Sources: NSO; and RBI Staff estimates.State of the Economy ARTICLE Chart III.16: Rural Nominal Wage (Y-o-y, per cent) 8.0 7.5 7.5 7.0 6.5 6.6 6.0 5.8 5.5 5.0 4.5 4.0 Agricultural labourers Non-agricultural labourers Average rural wage Sources: Labour Bureau, Ministry of Labour and Employment. Rural labour wage growth remained largely stable cleaning, light motor vehicle and tractor drivers, and in June 2025 as the non-agricultural sector wage mason workers. edged up, while wage growth in the agricultural IV. Financial Conditions sector saw a modest moderation (Chart III.16). Increase in non-agricultural wage growth was Overall financial conditions remained benign primarily driven by occupations including sweeping/ during July and August (till August 21) [Chart IV.1]. 22 For detailed methodology, refer to Bandyopadhyay, P., Kumar, A., Kumar, P. and Bhattacharyya, I. (2025), ‘Financial Condition Index for India: A High- frequency Approach’; Reserve Bank of India Bulletin, June. https://rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=23451 RBI Bulletin August 2025 53 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ Chart IV.1: Daily Financial Conditions Index for India (Standard deviation from average since 2012) 1.0 0.5 0.0 -0.5 -1.0 -1.5 Money Government securities Corporate bond Equity Foreign exchange Financial conditions index (standardised) Note: The financial conditions index provides a metric based on its historical average; in this context, a zero value corresponds to a financial system operating at the historical average level of all the financial indicators included in the index. To present the results, standardised index is used.22 Source: RBI staff estimates. 42-rpA-8 42-rpA-82 42-yaM-81 42-nuJ-7 42-nuJ-72 42-luJ-71 42-guA-6 42-guA-62 42-peS-51 42-tcO-5 42-tcO-52 42-voN-41 42-ceD-4 42-ceD-42 52-naJ-31 52-beF-2 52-beF-22 52-raM-41 52-rpA-3 52-rpA-32 52-yaM-31 52-nuJ-2 52-nuJ-22 52-luJ-21 52-guA-1 52-guA-12 Table III.6: Petroleum Products Prices Item Unit Domestic Prices Month-over- month (per cent) Aug-24 Jul-25 Aug-25^ Jul-25 Aug-25^ Petrol ₹/litre 100.97 101.12 101.12 0.0 0.0 Diesel ₹/litre 90.42 90.53 90.53 0.0 0.0 Kerosene ₹/litre 46.65 43.03 44.47 7.1 3.4 (subsidised) LPG (non- ₹/cylinder 813.25 863.25 863.25 0.0 0.0 subsidised) Notes: 1. ^: For the period August 1-22, 2025. 2. Other than kerosene, prices represent the average Indian Oil Corporation Limited (IOCL) prices in four major metros (Delhi, Kolkata, Mumbai and Chennai). For kerosene, prices denote the average of the subsidised prices in Kolkata, Mumbai and Chennai. Sources: IOCL; Petroleum Planning and Analysis Cell (PPAC); and RBI staff estimates. Tighter conditions Easier conditionsARTICLE State of the Economy System liquidity remained in surplus during July Money Market and August (up to August 21), primarily driven by Amidst ample liquidity, the weighted average higher government spending. The average daily net call rate – the operating target of monetary policy – absorption under the liquidity adjustment facility hovered in the lower half of the corridor. The rate, stood at ₹3.07 lakh crore during July 16 to August however, briefly inched towards the marginal standing 21, 2025, marginally lower than in the preceding facility rate during July 21 to July 23 on account of one-month period (Chart IV.2). During this period, large GST outflows. Consequent to surplus liquidity to absorb excess liquidity which was exerting absorption through VRRR auctions, the spread downward pressure on the overnight money market between the weighted average call rate and the policy rates, the Reserve Bank conducted 12 variable rate repo rate narrowed (Chart IV.3a).25 Overnight rates in reverse repo (VRRR) auctions (overnight to 8-day).23 the collateralised segments − the triparty and market To tide over temporary liquidity tightness due to tax related outflows, the Reserve Bank also conducted repo – and the benchmark secured overnight rupee three variable rate repo (VRR) auctions of 2-day rate largely moved in tandem with the uncollateralised and overnight maturity. The banks’ recourse to the rate.26 Recently, an Internal Working Group to review marginal standing facility remained low on easy the Reserve Bank’s extant liquidity management liquidity conditions.24 framework has recommended the continuation of Chart IV.2: Liquidity Operations (₹ lakh crore) 4.5 3.5 2.5 1.5 0.5 -0.5 -1.5 -2.5 -3.5 -4.5 Daily standing deposit facility Variable rate reverse repo Marginal standing facility Variable rate repo Source: RBI. 23 Accordingly, the average absorption through the standing deposit facility declined to 40.3 per cent of the total absorptions during July 16 to August 21, 2025, as against 76.3 per cent during June 16 to July 15, 2025. 24 Average of 0.02 lakh crore. 25 The spread between weighted average call rate and repo rate narrowed to (-) 6 bps during July 16 to August 14, 2025 from (-)19 bps during June 16 to July 21, 2025. 26 In line with the recommendations of the Committee on the MIBOR Benchmark (Chairperson: Shri Ramanathan Subramanian), it was proposed to develop a benchmark secured overnight rupee rate based on the secured money markets (both basket repo and triparty repo). Financial Benchmarks India Private Limited (FBIL) has started publishing the rate at a daily frequency. 54 RBI Bulletin August 2025 42-ceD-12 42-ceD-03 52-naJ-8 52-naJ-71 52-naJ-62 52-beF-4 52-beF-31 52-beF-22 52-raM-3 52-raM-21 52-raM-12 52-raM-03 52-rpA-8 52-rpA-71 52-rpA-62 52-yaM-5 52-yaM-41 52-yaM-32 52-nuJ-1 52-nuJ-01 52-nuJ-91 52-nuJ-82 52-luJ-7 52-luJ-61 52-luJ-52 52-guA-3 52-guA-21 52-guA-12 Net liquidity adjustment facility Total absorptionState of the Economy ARTICLE Chart IV.3: Policy Corridor and Money Market Rates a. Policy Corridor and Call Rate b. Money Market Rates (Per cent) (Per cent) 8.5 8.0 7.5 7.0 6.18 6.5 6.0 5.79 5.5 5.0 5.48 4.5 Tri-party repo Market repo Repo rate Weighted average call rate 3-month treasury bill 3-month certificate of deposit Standing deposit facility Marginal standing facility 3-month commercial paper (NBFC) Sources: RBI; Clearing Corporation of India Limited; and Bloomberg. weighted average call rate as the operating target of receding expectations of further monetary policy monetary policy.27 easing. Following the announcement of S&P’s upgrade of India’s sovereign rating on August 14, 2025 the Overall, interest rates in the term money market remained broadly stable (Chart IV.3b).28 The average 10-year G-sec yields eased briefly. Thereafter, yields yields hardened marginally for treasury bills while hardened during the third week of August. The commercial papers and certificates of deposit rates average term premium (the difference between the softened.29 10-year G-sec yield and the 91-day treasury bill yield) increased by 3 bps during July 16 to August 21, 2025 Government Securities (G-sec) Market as compared to June 16 to July 15, 2025 (Charts IV.4a In the fixed income segment, 10-year G-sec yields and IV.4b). firmed up during mid-July to early August, amidst uncertainties over India-US trade negotiations and Corporate Bond Market 27 The weighted average call rate is found to be highly correlated with Corporate bond yields as well as their spreads other overnight money market rates in the collateralised segments and is over the corresponding risk-free rates generally rose also found to be effective in transmitting signals to other money market instruments across maturities. Further details can be found in the Report across tenors and rating spectrum (Table IV.1).30 of the Internal Working Group to Review the Liquidity Management Framework − July 2025. https://rbidocs.rbi.org.in/rdocs//PublicationReport/ Money and Credit Pdfs/IWG060820254255B36745A04F23A683956447CB227A.PDF 28 The average yields on 3-month treasury bills hardened by 6 bps, while Reserve money growth, adjusted for the first- the average yields on 3-month commercial papers issued by NBFCs and round impact of changes in the cash reserve ratio, 3-month certificate of deposit declined by 1 bps and 3 bps, respectively, during the period July 16 to August 21, 2025, as compared to the period increased during the month, tracking growth in June 16 to July 15, 2025. currency in circulation. Currency in circulation grew 29 The average risk premium in the money market (the spread between the yields on 3-month commercial paper by NBFCs and 91-day treasury bill) declined to 75 bps during the current period from 82 bps in the 30 Corporate bond issuances remained high at ₹1.08 lakh crore up to June preceding period. 2025, up from 0.95 lakh crore in May 2025. RBI Bulletin August 2025 55 42-ceD-62 52-naJ-21 52-naJ-92 52-beF-51 52-raM-4 52-raM-12 52-rpA-7 52-rpA-42 52-yaM-11 52-yaM-82 52-nuJ-41 52-luJ-1 52-luJ-81 52-guA-4 52-guA-12 7.5 7.0 6.5 6.0 5.52 5.5 5.0 42-tcO-13 42-voN-41 42-voN-82 42-ceD-21 42-ceD-62 52-naJ-9 52-naJ-32 52-beF-6 52-beF-02 52-raM-6 52-raM-02 52-rpA-3 52-rpA-71 52-yaM-1 52-yaM-51 52-yaM-92 52-nuJ-21 52-nuJ-62 52-luJ-01 52-luJ-42 52-guA-7 52-guA-12ARTICLE State of the Economy Chart IV.4: Developments in G-sec Market a. Movement in G-sec yield b. Term Premium (Per cent) (Per cent) 7.3 7.0 6.7 6.53 6.4 6.20 6.1 5.8 6.04 5.5 3 year 5 year 10 year Note: In chart b, term premium is calculated as the difference between the 10-year G-sec yield and the 91-day treasury bill yield. Sources: Bloomberg; FIMMDA; and RBI staff estimates. ahead of the festive season and waning impact of marginal uptick compared to the previous month, with deposit growth remaining steady (Chart IV.6 withdrawal of ₹2000 denominated banknotes. The and Annex Chart A9).33 During 2025-26 so far, while growth in money supply (M ) remained broadly stable 3 the flow of non-food bank credit declined, this during July (Chart IV.5).31,32 reduction was more than offset by higher inflows Scheduled commercial banks’ credit growth from non-bank sources. Consequently, the total continued to remain subdued in July, despite a flow of financial resources to the commercial sector Table IV.1: Corporate Bonds - Rates and Spread Interest Rates Spread (bps) (Per cent) (Over Corresponding Risk-free Rate) Instrument June 16, 2025 – July 16, 2025 – Variation June 16, 2025 – July 16, 2025 – Variation July 15, 2025 August 20, 2025 (bps) July 15, 2025 August 20, 2025 (bps) 1 2 3 (4 = 3-2) 5 6 (7 = 6-5) Corporate Bonds (i) AAA (1-year) 6.55 6.54 -1 95 92 -3 (ii) AAA (3-year) 6.91 6.97 6 95 97 2 (iii) AAA (5-year) 7.13 7.13 0 96 93 -3 (iv) AA (3-year) 7.84 8.03 19 188 203 15 (v) BBB- (3-year) 11.49 11.66 17 553 566 13 Note: Yields and spreads are computed as averages for the respective periods. Sources: Fixed Income Money Market and Derivatives Association of India; and Bloomberg. 31 Reserve money (adjusted for CRR) grew by 8.9 per cent (y-o-y) as on August 15, 2025 [7.8 per cent (y-o-y) as on July 18, 2025]. Currency in circulation grew by 8.8 per cent (y-o-y) as on August 15, 2025 [7.2 per cent (y-o-y) as on July 18, 2025]. 32 Money supply grew by 9.6 per cent (y-o-y) as on August 8, 2025 [9.5 per cent (y-o-y) as on July 11, 2025]. It includes the impact of the merger of a non- bank with a bank (with effect from July 1, 2023). 33 Credit growth of scheduled commercial banks was 10.2 per cent (y-o-y) as on August 8, 2025 [9.9 per cent (y-o-y) a month ago]. Deposit growth was 10.1 per cent (y-o-y) as on August 8, 2025 [10.1 per cent (y-o-y) a month ago]. 56 RBI Bulletin August 2025 42-ceD-62 52-naJ-90 52-naJ-32 52-beF-60 52-beF-02 52-raM-60 52-raM-02 52-rpA-30 52-rpA-71 52-yaM-10 52-yaM-51 52-yaM-92 52-nuJ-21 52-nuJ-62 52-luJ-01 52-luJ-42 52-guA-70 52-guA-12 1.2 1.07 1.0 0.8 0.6 0.4 0.2 0.0 42-guA-6 42-guA-62 42-peS-51 42-tcO-5 42-tcO-52 42-voN-41 42-ceD-4 42-ceD-42 52-naJ-31 52-beF-2 52-beF-22 52-raM-41 52-rpA-3 52-rpA-32 52-yaM-31 52-nuJ-2 52-nuJ-22 52-luJ-21 52-guA-1 52-guA-12State of the Economy ARTICLE Chart IV.5: Growth in Reserve Money and Money Supply (M ) 3 (Y-o-y, per cent) 12 11 9.6 10 9 8 8.9 7 6 5 4 Sources: RBI. registered an increase, notwithstanding slower Across key sectors, bank credit growth recorded growth in bank credit. With faster monetary policy a modest improvement in June (Annex Chart transmission to money markets, large corporates have A10).34,35 Personal loans, the primary driver of increasingly turned to market-based instruments such credit growth, registered a notable pick-up. It was as commercial paper and corporate bonds for funding, largely supported by the housing segment, which thereby reducing the demand for bank credit. accounts for nearly half of the loans extended under 34 As at end-June, growth in non-food bank credit stood at 10.2 per cent (y-o-y), up from 9.8 per cent (y-o-y) recorded in May 2025. 35 Sectoral non-food credit data are based on sector-wise and industry-wise bank credit (SIBC) return, which covers select banks accounting for about 95 per cent of total non-food credit extended by all scheduled commercial banks, pertaining to the last reporting Friday of the month. Data exclude the impact of the merger of a non-bank with a bank. RBI Bulletin August 2025 57 42-naJ-62 42-beF-61 42-raM-80 42-raM-92 42-rpA-91 42-yaM-01 42-yaM-13 42-nuJ-12 42-luJ-21 42-guA-20 42-guA-32 42-peS-31 42-tcO-40 42-tcO-52 42-voN-51 42-ceD-60 42-ceD-72 52-naJ-71 52-beF-70 52-beF-82 52-raM-12 52-rpA-11 52-yaM-20 52-yaM-32 52-nuJ-31 52-luJ-40 52-luJ-52 52-guA-51 Reservemoney (CRR adjusted) Money Supply Chart IV.6: Scheduled Commercial Banks: Credit and Deposit Growth (Y-o-y, per cent) 22 20 18 16 14 10.2 12 10 10.1 8 Note: Scheduled commercial banks’ data are inclusive of regional rural banks. Data include the impact of the merger of a non-bank with a bank. Source: Fortnightly Section 42 Returns, RBI. 32-luJ-41 32-guA-11 32-peS-80 32-tcO-60 32-voN-30 32-ceD-10 32-ceD-92 42-naJ-62 42-beF-32 42-raM-22 42-rpA-91 42-yaM-71 42-nuJ-41 42-luJ-21 42-guA-90 42-peS-60 42-tcO-40 42-voN-10 42-voN-92 42-ceD-72 52-naJ-42 52-beF-12 52-raM-12 52-rpA-81 52-yaM-61 52-nuJ-31 52-luJ-11 52-guA-80 Credit growth Deposit growthARTICLE State of the Economy personal loans, along with an increase in vehicle in the case of public sector banks relative to private loans and other personal loans. Services sector also banks (Chart IV.7). Similarly, on the deposit side, recorded an uptick, as bank credit to NBFCs turned transmission was higher for public sector banks positive, reversing the contraction observed in compared to private banks. the previous month. Nevertheless, these entities Equity Markets continued to access funds through money and Equity markets declined in July amidst lingering capital market instruments. Industrial credit also tariff uncertainty and mixed corporate earnings witnessed an improvement. While there was results for Q1:2025-26. Steady inflows from continued contraction in infrastructure sector, credit domestic institutional investors, notably mutual to the MSMEs has been expanding at a strong pace. funds, helped cushion the impact of FPI outflows Deposit and Lending Rates from equities. A marginal recovery led by gains in The pass-through of the cumulative 100- automobile sector stocks in early August was wiped bps reduction in the repo rate during February out by fresh uncertainty surrounding India-US trade 2025 to June 2025 to lending and deposit rates, negotiations. The markets recovered subsequently especially for fresh deposits and loans, has been amidst optimism surrounding India’s sovereign strong. The weighted average lending rate on credit rating upgrade and the announcement of GST fresh and outstanding rupee loans of scheduled reforms (Chart IV.8). commercial banks declined. On the deposit side, External Sources of Finance the weighted average domestic term deposit rates Gross inward FDI reached a four-year high in on fresh and outstanding deposits also moderated June (Chart IV.9a). The US, Cyprus and Singapore (Table IV.2). together accounted for more than three-fourths of The decline in the weighted average lending rate total FDI inflows. Computer services, manufacturing, on fresh and outstanding rupee loans was higher and construction were the top recipient sectors. Table IV.2: Transmission to Banks’ Deposit and Lending Rates (Variation in basis points) Period Term Deposit Rates Lending Rates Repo Rate WADTDR- WADTDR- EBLR 1-Year MCLR WALR - Fresh WALR- Fresh Outstanding (Median) Rupee Loans Outstanding Deposits Deposits Rupee Loans Overall Interest Rate Effect # (1) (2) (3) (4) (5) (6) (7) (8) (9) Tightening Period +250 259 206 250 175 181 193 115 May 2022 to Jan 2025 Easing Phase -100 -87 -10 -100 -25 -71 -55 -39 Feb 2025 to Jul* 2025 Notes: Data on EBLR pertain to 32 domestic banks. *: Data on WADTDR and WALR pertain to June 2025. #: At constant share. WALR: Weighted Average Lending Rate; WADTDR: Weighted Average Domestic Term Deposit Rate; MCLR: Marginal Cost of Funds-based Lending Rate; EBLR: External Benchmark-based Lending Rate. Source: RBI. 58 RBI Bulletin August 2025State of the Economy ARTICLE Chart IV.7: Transmission across Bank Groups (February 2025 – June 2025) a. Lending Rates b. Deposit Rate (Basis points) (Basis points) 0 0 -5 -20 -20 -8 -40 -32 -40 -41 -46 -60 -60 -80 -68 -80 -67 -77 -78 -83 -100 -100 -89 -120 -120 -122 -140 -140 WALR WALR WADTDR WADTDR (Fresh rupee loans) (Outstanding rupee loans) (Fresh deposits) (Outstanding deposits ) Public sector banks Private banks Foreign banks Public sector banks Private banks Foreign banks Note: Transmission during February to June 2025 is calculated by subtracting the weighted average lending and deposit rates of January 2025 from those of June 2025. Source: RBI. However, both repatriation of FDI and outward FDI FPI recorded net outflows in July and August, also increased. Top sectors for outward FDI included reversing two consecutive months of inflows, as financial, manufacturing, insurance and business equity outflows intensified amidst persistent global services, and the major destinations were Singapore, trade tensions and heightened risk-off sentiment the US, the UK and the UAE (Chart IV.9b). As a result, following US tariff announcements (Chart IV.10). In net FDI inflows remained muted. contrast, the debt segment saw modest net inflows, Chart IV.8: BSE Sensex and Institutional Flows (Index, left scale; ₹ thousand crores, right scale) FPI flows (RHS) Mutual fund flows (RHS) Sensex Note: FPI and mutual fund flows are represented on 15-days rolling sum basis. Source: Bloomberg. RBI Bulletin August 2025 59 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ 52-guA 88000 90 85000 81306.85 70 82000 50 79000 30 76000 73000 10 70000 -10 67000 -30 64000 -50 61000 58000 -70 55000 -90ARTICLE State of the Economy Chart IV:9: Foreign Direct Investment Flows a. Gross and Net FDI b. Country-Wise Outward FDI in June (US$ billion) (US$ billion) 15 10 5 1.1 0 -5 -10 Net outward FDI Repatriation/Disinvestment Gross FDI Net FDI Source: RBI. supported by primary debt issuances and inflows in half of the total external commercial borrowings G-sec through fully accessible route.36 registered during this period were intended for capital expenditure. The registrations of external commercial borrowings moderated in Q1:2025-26, although India’s foreign exchange reserves remained inflows continued to outpace outflows, resulting in adequate, providing a cover for more than 11 months positive net inflows (Chart IV.11). Notably, nearly of goods imports and for more than 94 per cent of 36 Fully accessible route is a separate channel introduced by RBI with effect from April 1, 2020 to enable non-residents to invest in specified Government of India securities without any investment ceilings. 60 RBI Bulletin August 2025 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ Singapore US UK UAE Oman Cayman Island 0 0.5 1 1.5 Chart IV.10: Foreign Portfolio Investments (US$ billion) 12 8 4 1.7 2.4 0 -2.5 -4 -8 -12 Equity Debt Total Notes: 1. Debt also includes investments under the hybrid instruments. 2. *: Data up to August 21. Source: National Securities Depository Limited (NSDL). 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ *52-guA -0.01State of the Economy ARTICLE Chart IV.11: External Commercial Borrowings - Registrations and Flows (US$ billion) 15 11.1 10 9.1 5 3.5 4.6 2.7 2.8 1.2 0.2 0 -5 -10 Registrations Net inflows Source: Form ECB, RBI. the external debt outstanding at end-March 2025 such depreciation, the rupee remained one of the (Chart IV.12).37 least volatile currencies among major EMDEs during Foreign Exchange Market the month. In August, the Indian rupee registered some gains against the US dollar following the The Indian rupee depreciated marginally against the US dollar in July, reflecting ongoing global trade announcement of S&P’s upgrade of India’s sovereign uncertainties and FPI outflows (Chart IV.13). Despite rating. 37 The import cover for goods and services combined was around nine months. RBI Bulletin August 2025 61 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 42 nuJ-rpA 52 nuJ-rpA Chart IV.12: India’s Foreign Exchange Reserves (US$ billion, left scale; months, right scale) Foreign exchange reserves Import cover (RHS) Notes: 1. *: As on August 15, 2025. 2. The import cover data for June and August 2025 is based on total merchandise imports for 2024-25, as per the balance of payments statistics. Source: RBI. 1.596 750 14 11.4 12 650 10 8 550 6 4 450 2 350 0 32-raM 32-nuJ 32-peS 32-ceD 42-raM 42-nuJ 42-peS 42-ceD 52-raM 52-nuJ *52-guA Chart IV.13: Movements in Major Currencies against the US Dollar in July 2025 (Per cent, m-o-m, left scale; per cent, right scale) 2 2 1 1 0 0 -1 -1 -2 -2 Percentage change (+ appreciation/ - depreciation) Volatility (RHS) Notes: 1. Appreciation/depreciation (m-o-m) calculated using monthly average exchange rates. 2. US dollar (DXY) measures the movements of the US dollar against a basket of major currencies (Euro, Japanese yen, British pound, Canadian dollar, Swedish krona, Swiss franc). 3. For each currency, volatility is measured as the coefficient of variation (100*Standard Deviation/Mean) using daily exchange rate data for July 2025. Sources: FBIL; Thomson Reuters; and RBI staff estimates. )YXD( ralloD SU xednI ycnerruC EME osep nacixeM oruE thab dnaliahT dnar nacirfA htuoS tiggnir naisyalaM laer nailizarB nauy esenihC haipur naisenodnI rallod gnoK gnoH gnod esemanteiV eepur naidnI dnuop KU now naeroK osep enippilihP ney esenapaJ -0.2ARTICLE State of the Economy Chart IV.14: Movements in the 40-Currency Real Effective Exchange Rate a. Monthly Changes b. Decomposition of Monthly Changes (Index (2015-16 = 100), left scale; per cent, right scale) (Per cent) 110 4 108 106 2 104 0.4 102 100 0 98 100.1 96 -2 94 92 90 -4 Change in REER (RHS) REER Source: RBI. In real effective terms, the Indian rupee for holding up aggregate demand. On the other hand, appreciated in July (Chart IV.14a). India’s inflation persisting uncertainties related to India-US trade (on a m-o-m basis) was higher than the weighted policies continue to pose downside risk. Inflation average inflation of its major trading partners, outlook for the near term has become more benign outweighing depreciation of the Indian rupee in than anticipated earlier. Headline inflation, driven by muted food price pressures supported by favourable nominal effective terms (Chart IV.14b). base effects, are likely to soften further below the 4 per V. Conclusion cent target in Q2 before inching up in the last quarter Favourable rainfall and temperature conditions of the financial year. Overall, the average headline bode well for the kharif agriculture season. An increase inflation this year is expected to remain significantly in real rural wages may support rural demand in the below the target.39 Monetary policy, going forward, second half of the financial year.38 Coupled with the would continue to maintain a close vigil on the incoming benign financial conditions, ongoing transmission data and the evolving domestic growth-inflation of rate cuts, supportive fiscal measures and rising dynamics to chart out the appropriate monetary household optimism, the environment is conducive policy path. 38 The monetary policy committee resolution of August 6th 2025, retained the real GDP growth for 2025-26 at 6.5 per cent, with Q1 at 6.5 per cent, Q2 at 6.7 per cent, Q3 at 6.6 per cent, and Q4 at 6.3 per cent. Real GDP growth for Q1:2026-27 was projected at 6.6 per cent. 62 RBI Bulletin August 2025 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ 4 2 0.8 0.4 0 -0.4 -2 -4 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ Relative price effect Nominal exchange rate effect Change in REER 39 The monetary policy committee resolution of August 6th 2025, projected CPI inflation for 2025-26 at 3.1 per cent with Q2 at 2.1 per cent; Q3 at 3.1 per cent; and Q4 at 4.4 per cent. CPI inflation for Q1:2026-27 was projected at 4.9 per cent.State of the Economy ARTICLE Annex Chart A1: Global Supply Chain Pressure Index 0.4 0.2 0.07 0.0 -0.2 -0.4 -0.6 -0.8 -1.0 Note: Index readings measure standard deviations from the index’s historical average. Source: Federal Reserve Bank of New York. RBI Bulletin August 2025 63 42-naJ 42-beF 42-raM 42-rpA 42-yaM 42-nuJ 42-luJ 42-guA 42-peS 42-tcO 42-voN 42-ceD 52-naJ 52-beF 52-raM 52-rpA 52-yaM 52-nuJ 52-luJ Chart A2: Inflation Gap (Actual minus Target) (Percentage points) Chart A3: Consumer Confidence Indices a. Rural (Index) 140 127.7 120 100.6 100 80 60 Current situation index Future expectations index Note: Inflation for the US is based on the US(PCE) data. Sources: Bloomberg; and RBI staff estimates. Sources: Rural and Urban Consumer Confidence Surveys, RBI. 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ b. Urban (Index) 140 124.7 120 100 96.5 80 60 Current situation index Future expectations index 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJARTICLE State of the Economy Chart A4: India's Merchandise Exports a. Trend in Exports b. Decomposition of Sequential Change in Export Growth (US$ billion, left scale; growth in per cent, right scale) (per cent, y-o-y) 45 40 40 30 35 30 20 25 7.3 10 20 15 0 10 -10 5 0 -20 Exports excluding petroleum, oil, and lubricants Petroleum, oil, and lubricants Y-o-y, growth (RHS) Sources: PIB; DGCI&S; and RBI staff estimates. 64 RBI Bulletin August 2025 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ 25 20 15 10 7 5 0 -5 -10 -15 -20 -25 Base effect Momentum ∆ in y-o-y growth 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ Chart A5: India's Merchandise Imports a. Trend in Imports b. Decomposition of Sequential Change in Import Growth (US$ billion, left scale; growth in per cent, right scale) (per cent, y-o-y) 80 60 60 40 40 20 8.6 20 0 0 -20 Imports excluding petroleum, oil, lubricants, and gold Petroleum, oil, and lubricants Gold Y-o-y, growth (RHS) Base effect Momentum ∆ in y-o-y growth Sources: PIB; DGCI&S; and RBI staff estimates. 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ 30 20 10 12 0 -10 -20 -30 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ Chart A6: Index of Supply Chain Pressures for India (Standard deviations from average value) 3 2 1 0 -0.14 -1 -2 -3 Note: ISPI depicts the deviation of supply chain situation in each month from long period average (time series starting from March 2005). Source: RBI staff estimates. 11-raM 11-luJ 11-voN 21-raM 21-luJ 21-voN 31-raM 31-luJ 31-voN 41-raM 41-luJ 41-voN 51-raM 51-luJ 51-voN 61-raM 61-luJ 61-voN 71-raM 71-luJ 71-voN 81-raM 81-luJ 81-voN 91-raM 91-luJ 91-voN 02-raM 02-luJ 02-voN 12-raM 12-luJ 12-voN 22-raM 22-luJ 22-voN 32-raM 32-luJ 32-voN 42-raM 42-luJ 42-voN 52-raM 52-luJState of the Economy ARTICLE Chart A7: PMI: Input and Output Prices a. Manufacturing b. Services (Index (50=No change) (Index (50=No change) 60 55 54.0 52.6 50 45 Note: A level of 50 corresponds to no change in activity, and a reading above 50 denotes expansion and vice versa. Source: S&P. RBI Bulletin August 2025 65 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ 60 55 53.2 50 45 Input prices Output prices Input prices Output prices 32-luJ 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ 53.0 Chart A8: Households' Median Inflation Expectations a. Rural b. Urban (Per cent) (Per cent) 11 10 9 8 7.9 7 6 5.8 5 Current 1 year ahead Current 1 year ahead Sources: Rural Consumer Confidence Survey; and Inflation Expectations Survey of Households, RBI 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ 11 10 9 9.0 8 7.2 7 32-peS 32-voN 42-naJ 42-raM 42-yaM 42-luJ 42-peS 42-voN 52-naJ 52-raM 52-yaM 52-luJ Chart A9: Scheduled Commercial Banks: Credit and Deposit Growth (Percentage points) a. Credit b. Deposit 3 2 1 0.5 0 -1 -0.7 -2 -3 Credit momentum effect Credit base effect Deposit momentum effect Deposit base effect Note: Scheduled commercial banks’ data are inclusive of regional rural banks. Data include the impact of the merger of a non-bank with a bank. Source: Fortnightly Section 42 Return, RBI. 42-luJ-21 42-guA-9 42-peS-6 42-tcO-4 42-voN-1 42-voN-92 42-ceD-72 52-naJ-42 52-beF-12 52-raM-12 52-rpA-81 52-yaM-61 52-nuJ-31 52-luJ-11 52-guA-8 2 1 0.6 0 -0.4 -1 -2 -3 -4 42-luJ-21 42-guA-9 42-peS-6 42-tcO-4 42-voN-1 42-voN-92 42-ceD-72 52-naJ-42 52-beF-12 52-raM-12 52-rpA-81 52-yaM-61 52-nuJ-31 52-luJ-11 52-guA-8ARTICLE State of the Economy Chart A10: Sectoral Deployment of Bank Credit (Y-o-y, per cent) a. Agriculture b. Industry 25 20 15 10 6.8 5 0 c. MSMEs (Industry) d. Large Industry e. Services f. Services - NBFCs g. Personal Loans h. Personal Loans - Housing Notes: 1. Sectoral non-food credit data is based on sector-wise and industry-wise bank credit (SIBC) return, which covers select banks accounting for about 95 per cent of total non-food credit extended by all SCBs, pertaining to the last reporting Friday of the month. Data are provisional. The bank groups covered under the SIBC return are - Public Sector Banks, Private Sector Banks, Foreign Banks, and Small Finance Banks. 2. Data exclude the impact of the merger of a non-bank with a bank. Source: RBI. 66 RBI Bulletin August 2025 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 12 10 8 6 5.5 4 2 0 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 20 17.4 15 10 5 0 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 10 8 6 4 2 0.9 0 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 30 25 20 15 9.6 10 5 0 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 40 30 20 10 2.7 0 -10 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 25 20 14.7 15 10 5 0 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJ 25 20 14.4 15 10 5 0 32-beF 32-rpA 32-nuJ 32-guA 32-tcO 32-ceD 42-beF 42-rpA 42-nuJ 42-guA 42-tcO 42-ceD 52-beF 52-rpA 52-nuJPrivate Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE Private Corporate Investment: major economy, underpinned by robust domestic demand, and steady progress on public infrastructure Growth in 2024-25 and investments. Outlook for 2025-26 Over the past few years, Indian corporates have undergone a phase of balance sheet repair, aided by Snigdha Yogindran, Sukti Khandekar, by deleveraging, improved cash flows, and strong Rajesh B Kavediya and Aloke Ghosh^ profitability across several sectors (RBI, FSR, June 2025). The banking sector’s improved asset quality This article examines private corporate investment and abundant liquidity have further enhanced the intentions in India during 2024–25 and the outlook credit environment, translating into easier access to for 2025-26, based on projects sanctioned by banks and financing for capacity expansion. Recent trends in financial institutions (FIs). The total cost of projects high-frequency indicators—such as rising imports sanctioned by banks/FIs at ₹3.68 lakh crore for 2024-25, of capital goods, improved capacity utilisation, lower than the previous year, points to tepid investment and increased flows in corporate bond markets— optimism of private corporates. Based on pipeline projects, signal renewed investment appetite among firms. financed through all channels, capital expenditure is Additionally, sector-specific policies, such as the expected to rise to ₹2.67 lakh crore in 2025–26, aided Production-Linked Incentive (PLI) schemes, energy by robust macroeconomic fundamentals, improved transition investments, and digital infrastructure balance sheets, rising capacity utilisation, easy liquidity expansion, are incentivising corporates to undertake conditions, infrastructure push, and a 100-bps policy fresh investments. rate cut starting from February 2025. Lower investment Amid this recovery, a key motivation for this announcements amid uncertain demand conditions article is to assess the evolving landscape of private along with higher cash buffer points to cautiously corporate investment and its near-term prospects. optimistic outlook for private investment activity. Several questions guide this analysis: Have investment Introduction intentions rebounded meaningfully? Which sectors and regions are leading this recovery? What is the role Private corporate investment remained as of alternative financing channels beyond traditional one of the vital contributors to India’s long-term bank credit? growth trajectory. After a period of subdued activity during the pandemic years, the investment cycle is As finalisation of corporate balance sheet takes being rejuvenated by a confluence of supportive time, many countries adopt survey-based approach to factors. In 2024–25, the macroeconomic backdrop assess the near-term outlook on corporate investment is characterised by robust GDP growth, sustained and perspective planning. Such surveys provide lead disinflation, and a consequent conducive monetary information on quantum and timing of investment policy stance. The domestic economy continues to for direct assessment of firms’ investment intentions demonstrate resilience, with real GDP growth of 6.5 that are expected to materialise in the near to per cent in 2024–25, making India the fastest-growing medium-term. ^The authors are from Department of Statistics and Information In the Indian context, the Reserve Bank has been Management. The views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India. tracking private capex plans through monitoring RBI Bulletin August 2025 67ARTICLE Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 of the projects that are funded by banks/financial convertible bonds (FCCBs) and rupee-denominated institutions (FIs) for assessing investment outlook. bonds (RDBs), and (iii) funds raised through initial This article analyses the characteristics, funding public offerings (IPOs), follow-on public offerings patterns, sectoral and regional distribution, and (FPOs), and rights issues for capex purpose. phasing profile of capex projects undertaken by To avoid double counting and consequent private corporates in 2024–25. Capital expenditure overestimation of capital investment, meticulous envisaged from pipeline projects1, which refers to efforts have been made to ensure that each project is the projects already undertaken for implementation, included in the dataset only once. This is achieved by are also estimated for 2024-25. The article draws on utilising internal databases of the Reserve Bank and multiple sources like bank/FI sanctions, external incorporating information supplied by the Securities commercial borrowings, and equity issuances, to and Exchange Board of India (SEBI), even when a present a holistic view of investment intentions. By project is funded through multiple sources. This study focusing on the timing and composition of proposed focuses exclusively on projects that receive funding capex, the article provides valuable forward- from the aforementioned sources, having a project looking insights into the investment cycle and its cost exceeding ₹10 crore, and majority ownership macroeconomic implications for 2025–26. stake of project with private corporates. Projects The article is structured into five sections. Section having majority stake holding with the Central and/ II outline the methodology and assumption. Section or State governments, and projects initiated by trusts III discusses the key features of projects sanctioned and educational institutions are excluded from the by banks/FIs during 2024-25, including the funding scope of this study. pattern and sectoral/regional distribution. Evaluation The estimates are derived under the assumption of the phasing profile and estimates the investment that companies adhere to their ex-ante capital growth outlook are presented in section IV, while expenditure plans. However, it is important to note that section V concludes the study. these estimates may differ from actual investments II. Methodology and Assumptions due to various reasons such as (a) modifications in timing or scale of planned investments, (b) shifts in To assess the short- to medium-term outlook of private corporate investment, this study adopts the funding patterns—e.g., substitution of debt or equity methodological framework developed by Rangarajan financing with internal accruals or FDI, which are not (1970)2. The analysis draws on three main data sources being captured in the project finance data collected reflecting diverse financing routes for capital projects: by the RBI, and (c) emergence of new projects or (i) private corporates’ capex projects sanctioned by cancellation of earlier ones. Further, it needs to banks and FIs, (ii) capex-related external commercial be recognised that the analysis presented in the borrowings (ECBs), including foreign currency article is based only those capex projects for which private corporates approached banks/FIs for funding 1 Pipeline projects are those projects which are already undertaken for implementation. Capex from pipeline projects are envisaged amounts for and accordingly, these estimates serve as a leading a given year, which got sanctioned prior to that given year. indicator of investment activity and may differ 2 The Methodology was published on 19th December, 1970 in the article “Forecasting Capital Expenditure in the Corporate Sector” authored by Dr. from national accounts-based estimates of private C Rangarajan in the Economic and Political Weekly (EPW), Volume No. 5, Issue No. 51, Page 2049-2051. corporate fixed capital formation. 68 RBI Bulletin August 2025Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE III. Characteristics of Projects Sanctioned/ FIs, having share of 25.8 per cent and 37.2 per cent Contracted in the total project costs, respectively. Deviation from During 2024-25, about 907 projects got assistance phasing plans of capex of these mega/large projects from banks/FIs with total cost of projects of ₹3,67,973 may affect the overall capex pattern in the medium- crore, as compared to 944 projects sanctioned during term (Annex Table A5). the previous year having total cost of ₹3,91,003 crore ii) Purpose-wise (Annex Table A1). Investment in green field (new) projects During 2024-25, 448 private companies, which accounted for the lion share of about 92 per cent did not avail of any financing from banks/FIs for capex in the total cost of projects financed by banks/FIs projects, raised ₹96,966 crore through ECBs for capex during 2024-25, in line with the trend seen in the purpose, while 229 other companies raised ₹32,295 past. Greenfield investment generally brings new crore through domestic equity issuances under the and additional resources and assets to the firms and initial public offering (IPO) route for funding their leads to gross fixed capital formation (GFCF). Higher capex needs. Overall, investment plans of 1,584 investment in green filed projects thus points to projects were made during 2024-25, with investment likely capacity expansion by private corporates going intentions of ₹4,97,235 crore, as against 1500 projects forward. Investment in expansion and modernisation in 2023-24 with investment intentions of ₹5,47,734 crore (Annex Table A1 - A4). of existing projects3 accounted for 7.8 per cent share in the total project cost (Annex Table A6). i) Size-wise iii) Industry-wise During 2024-25, ten mega projects (with project cost ₹5,000 crore and above) and 75 large projects Industry-wise distribution of projects sanctioned (₹1000 crore-₹5000 crore), got sanctioned by banks/ during 2024-25 indicates that the infrastructure Chart 1: Share of Major Industries in Aggregate Cost of Projects Sanctioned by Banks/FIs (Per cent) 45 39.7 40 35 30 25 20 15 8.9 10 7.9 5.6 4.6 4.6 3.9 5 0 Power Roads & Chemicals & Construction Electrical & Metal & metal IT software bridges pesticides electronics products 2013-14 to 2021-22 2022-23 2023-24 2024-25 Sources: Data on project finance gathered from banks/FIs; and RBI staff estimates. 3 Investment in expansion and modernisation of existing projects generally relates to investment required for upgradation of existing technology/ processes to improve production and/or its quality. RBI Bulletin August 2025 69ARTICLE Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 sector4 remained the major sector accounting for 50.6 Maharashtra, Andhra Pradesh, Rajasthan and Uttar per cent share in the total cost of projects, primarily Pradesh, together accounts for about 60 per cent driven by investment in ‘Power’, followed by ‘Road share in total cost of projects during 2024-25. Share & bridges’ (Annex Table A7). However, the share of Gujarat, Maharashtra and Rajasthan improved of infrastructure related projects in the total cost significantly from the previous year (Chart 2 and of projects was lowest in the last ten years. Beside Annex Table A8). infrastructure, among the other major industries, IV. Phasing Profile of Investment Intentions chemicals & pesticides, construction, electrical Phasing profile of capital expenditures of equipments, and metal & metal products also projects sanctioned by banks/FIs till end of the accounted for the sizable share in the total cost of financial year 2024-25 provides near-term (one year projects (Chart 1 and Annex Table 7). ahead) investment outlook of private corporates. The iv) State-wise phasing from the cohort of projects sanctioned in The regional factors, for instance, accessibility of 2024-25 indicates that 39.3 per cent (₹1,44,782 crore) raw materials, availability of suppliers, availability of of the total proposed capital expenditure was planned skilled labour, presence of adequate infrastructure, to be invested by the year-end 2024-25, while 35.2 size of the market, growth potential, and demand per cent (₹1,29,591 crore) is planned to be spent in conditions remained crucial in destination choice 2025-26 and another 25.4 per cent (₹93,600 crore) in for the investment. For the analysis purpose, in this the subsequent period. Based on the phasing profile article, the projects which are spread across multiple of projects sanctioned by banks/FIs till 2024-25, the states have been classified as “multi-state” projects. envisaged capex recorded a marginal increase of 0.4 The state-wise distribution of projects sanctioned per cent to ₹2,95,234 crore during 2024-25 over the revealed that the top five states viz., Gujarat, previous year (Annex Table A1). Chart 2: Share of Major States in Aggregate Cost of Projects Sanctioned by Banks/FIs (Per cent) 25 21.4 20 15.1 15 9.3 10 7.3 7.1 6.2 5 0 Gujarat Maharashtra Andhra Pradesh Rajasthan Uttar Pradesh Karnataka 2013-14 to 2021-22 2022-23 2023-24 2024-25 Sources: Data on project finance gathered from banks/FIs; and RBI staff estimates. 4 Infrastructure sector comprising of (a) power, (b) telecom, (c) ports and airports, (d) storage and water management, (e) special economic zone (SEZ), industrial, biotech and IT park, and (f) roads & bridges. 70 RBI Bulletin August 2025Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE Resources raised through the ECB and IPO route by to be invested in the subsequent years. The phasing private corporates supplement the financing of their profile of pipeline projects financed through all the investment activities. From the fund raised through three channels suggests that the envisaged capex the ECB route for capex purpose during 2024-25 and could increase substantially to ₹2,67,432 crore in prior period, capital expenditure planned to be made 2025-26 from ₹2,20,132 crore in 2024-25. during 2024-25 remained robust at ₹1,00,747 crore, Despite global uncertainties, Indian firms are though remained lower than the previous year. Also, entering the new fiscal year with healthier balance planned capital expenditure from the fund raised sheets, higher cash buffer, improved profitability, through the IPO route for capex purpose increased and greater access to diversified funding sources. The significantly to ₹18,943 crore in 2024-25, though its continued policy push for infrastructure, sustained share in total envisaged capital expenditure remained disinflation, combined with lower interest rates, easy miniscule (Annex Table A2 and A3). liquidity conditions, and rising capacity utilisation, is fostering an environment conducive to private Overall, based on the various channels of investment. fundings, as alluded earlier, total capital investment of ₹4,14,923 crore was intended to be made by the Looking ahead, the investment outlook remains private corporate sector in 2024-25, broadly similar cautiously optimistic. While external risks such as to the planned capex during the previous year. The geopolitical tensions, global uncertainty and demand phasing profile of the envisaged capex, based on the slowdown may influence investment sentiment, the pipeline projects sanctioned by the banks/ FIs in the domestic fundamentals appear robust. Importantly, previous years prior to the reference year, indicate the composition of investments—driven largely by that envisaged capital investment increased from greenfield infrastructure projects—signals not only ₹1,68,204 crore in 2024-25 to ₹1,91,073 crore in 2025- cyclical recovery but also structural capacity building. 26; while based on all channels of financing taken The ability of firms to convert intentions into together, it stood at ₹2,67,432 crore in 2025-26 as execution will be critical in shaping the next phase of against ₹2,20,132 crore in 2024-25 (Annex Table A1 India’s growth. Thus, sustained monitoring of project and A4). implementation and supportive policy measures will be vital to translating this momentum into durable V. Conclusion economic gains. The analysis of project finance data points to References: lower investment optimism as reflected in tepid C Rangarajan (1970). Forecasting Capital Expenditure total cost of projects during 2024–25 as compared in the Corporate Sector. Economic and Political to previous year. Infrastructure sector continued Weekly (EPW), Volume No. 5, Issue No. 51, Page 2049- to attract the major share of envisaged capital 2051. investment, led by ‘Power’ sector. Of the total cost of projects sanctioned by banks/FIs during 2024-25, RBI (2025). Financial Stability Report, June. 39.3 per cent was planned to be invested by the end Retrieved from https://rbidocs.rbi.org.in/rdocs/ of financial year 2024-25, 35.2 per cent is provided for PublicationReport/Pdfs/0FSRJUNE20253006258AE79 2025-26 and the remaining 25.4 per cent is envisaged 8B4484642AD861CC35BC2CB3D8E.PDF RBI Bulletin August 2025 71ARTICLE Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 72 RBI Bulletin August 2025 sIF/sknaB yb denoitcnaS stcejorP fo xepaC fo gnisahP :1A elbaT dnoyeB 62-5202 52-4202 42-3202 32-2202 22-1202 12-0202 02-9102 91-8102 81-7102 71-6102 61-5102 51-4102 41-3102 tcejorP tcejorP fo oN fo raeY ot eud tsoC ni tsoC stcejorP ↓ noitcnas /noisiveR fo raeY eht ^noitallecnaC noitcnaS )erorc₹ ni( )erorc₹( 62-5202 71 61 51 41 31 21 11 01 9 8 7 6 5 4 3 2 1 2741 2274 12441 27143 85639 306,07,1 otpu 41-3102 630,1 261 642,1 535,9 567,52 985,43 029,41 )4.0( 352,78 106,78 623 51-4102 022 251,1 469,4 970,8 826,82 715,73 434,7 787,3 )8.3( 187,19 173,59 643 61-5102 680,2 100,4 665,8 346,12 570,14 681,17 883,52 259,3 253,1 )0.2( 942,97,1 708,28,1 145 71-6102 242 243,2 202,01 767,22 634,14 100,36 544,21 481,51 026 )6.2( 932,86,1 138,27,1 584 81-7102 53 366,2 957,9 842,12 080,74 379,95 000,11 268,6 965 )8.9( 981,95,1 185,67,1 904 91-8102 491 992,2 411,41 611,82 655,85 879,35 425,41 940,4 )1.21( 38,57,1 830,00,2 023 02-9102 106 768,3 117,9 661,62 310,92 907,3 194,2 )0.0( 855,57 855,57 022 12-0202 693 646,1 145,3 744,81 603,44 226,95 345,01 016,3 )8.0( 111,24,1 413,34,1 104 22-1202 568,2 833,51 249,74 935,29 699,78 366,61 051,2 721,1 )0.0( 126,66,2 745,66,2 745 32-2202 794,81 994,44 629,51,1 806,36,1 554,93 387,6 532,2 )0.0( 300,19,3 879,09,3 449 42-3202 006,39 195,92,1 920,72,1 402,31 370,3 674,1 379,76,3 709 52-4202 853,51,1 370,19,1 432,59,2 999,39,2 165,10,2 310,35,1 961,83,1 520,34,1 566,64,1 271,33,1 770,34,1 595,83,1 352,04,1 266,09,1 dnarG &latoT # 4.0 9.54 7.13 7.01 4.3- 5.2- 1.01 9.6- 2.3 2.1- 4.62- egatnecreP egnahc degasivne ylno gnitaroprocni etna xe si etamitse ehT .sraey suoirav ni ecnatsissa laicnanif deviecer hcihw stcejorp eht gnirevoc raey ralucitrap a ni xepac degasivne etacidni slatot nmuloC :& .desilitu/desilaer yllautca esoht morf tnereffid era yehT .stnemtsevni .elbaliava tey ton si 62-5202 ni denoitcnas eb ot ylekil era taht lasoporp morf xepac sa tuo dekrow ton si 62-5202 rof egnahc tnec reP :# .noitallecnac/noisiver fo egatnecrep era tekcarb ni serugiF :^Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE RBI Bulletin August 2025 73 **sBDR/sBCCF /sBCE hguorht dednuF *stcejorP xepaC fo gnisahP :2A elbaT dnoyeB 62-5202 52-4202 42-3202 32-2202 22-1202 12-0202 02-9102 91-8102 81-7102 71-6102 61-5102 51-4102 41-3102 naol latoT sNRL fo oN fo raeY 62-5202 detcartnoc deussi ↓ noitcnas )erorc₹( 61 51 41 31 21 11 01 9 8 7 6 5 4 3 2 1 698,4 673,72 468,87 41-3102 otpu 2 2 575 151,3 608,61 197,63 723,75 874 51-4102 4 275,2 113,7 899,82 588,83 413 61-5102 2 2 291,1 500,6 359,41 451,22 643 71-6102 7 925 484,6 450,31 228,71 698,73 914 81-7102 66 448,1 893,5 632,1 527,71 122,64 094,27 515 91-8102 582 569 717,11 751,71 763,56 194,59 594 02-9102 132 576,1 912,3 475,31 568,12 465,04 263 12-0202 98 980,5 455,61 513,92 31 950,15 363 22-1202 059 834,41 587,13 729,33 101,18 393 32-2202 837,81 961,12 871,43 633,67 124,05,1 334 42-3202 384,4 066,04 118,15 21 669,69 844 52-4202 122,32 977,26 747,00,1 842,51,1 905,65 110,06 208,04 085,98 374,06 479,62 514,52 007,05 761,46 468,87 &latoT dnarG # 6.21- 9.301 8.5- 1.74 5.45- 1.84 2.421 1.6 9.94- 0.12- 6.81- egatnecreP egnahc .sIF/sknab morf ecnatsissa eviecer ton did hcihw stcejorP :* .71-6102 ecnis dedulcni neeb evah )sBDR( sdnoB detanimoneD eepuR :** .elbaliava tey ton si 62-5202 ni nward eb ot ylekil era taht slasoporp morf xepac sa tuo dekrow ton si 62-5202 rof egnahc tnecreP :# .desilitu/desilaer yllautca esoht morf tnereffid era yehT .tnemtsevni degasivne ylno gnitaroprocni etna xe si etamitse ehT :& rebmun noitartsiger naoL :NRLARTICLE Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 74 RBI Bulletin August 2025 *seussI ytiuqE hguorhT dednuF stcejorP fo xepaC fo gnisahP :3A elbaT dnoyeB 62-5202 52-4202 42-3202 32-2202 22-1202 12-0202 02-9102 91-8102 81-7102 71-6102 61-5102 51-4102 41-3102 xepaC fo .oN ytiuqE 62-5202 degasivnE seinapmoC deussi )erorc₹( ↓ gnirud 61 51 41 31 21 11 01 9 8 7 6 5 4 3 2 1 07 294 494 41-3102 otpu 233 755 981 870,1 42 51-4102 17 381 948 357,2 446 11 115,4 04 61-5102 341 361 863 174 41 951,1 92 71-6102 5 787 723 914 835,1 15 81-7102 31 09 605 906 93 91-8102 2 94 2 35 21 02-9102 91 48 124 931 366 21 12-0202 004 939 403,1 757 01 014,3 72 22-1202 672 181,2 271,1 926,3 24 32-2202 739 613,2 999,2 85 013,6 321 42-3202 305,3 346,21 159,51 991 592,23 922 52-4202 305,3 085,31 349,81 733,6 816,2 871,1 961 041,1 181,1 636,1 655,3 582,1 296 494 &latoT dnarG # 9.891 1.241 2.221 0.795 2.58- 5.3- 8.72- 0.45- 7.671 7.58 1.04 egatnecreP egnahc .sBDR/sBCCF/sBCE/sIF/sknab morf ecnatsissa eviecer ton did hcihw stcejorP :* .elbaliava tey ton si 62-5202 ni detnemelpmi eb ot ylekil era taht slasoporp morf xepac sa tuo dekrow ton si 62-5202 rof egnahc tnec reP :# .desilitu / dezilaer yllautca esoht morf tnereffid era yeht ,tnemtsevni degasivne ylno gnitaroprocni etna xe si etamitse ehT :&Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE RBI Bulletin August 2025 75 sOPI/*sBDR/sBCCF/sBCE/sOPI/sIF/sknaB hguorhT dednuF stcejorP fo xepaC fo gnisahP :4A elbaT dnoyeB 62-5202 52-4202 42-3202 32-2202 22-1202 12-0202 02-9102 91-8102 81-7102 71-6102 61-5102 51-4102 41-3102 tcejorP fo oN fo raeY 62-5202 tsoC seinapmoC ↓ noitcnas /sknaB ro )erorc ₹( /sBCE /sIF / sBCCF sOPI/ sBDR 61 51 41 31 21 11 01 9 8 7 6 5 4 3 2 1 274,1 227,4 124,41 831,93 625,12,1 169,94,2 41-3102 otpu 830,1 461 128,1 810,31 821,34 965,17 029,41 600,64,1 828 51-4102 022 322,1 151,5 005,11 296,83 951,76 544,7 787,3 767,83,1 007 61-5102 680,2 300,4 1178 899,22 844,74 016,68 204,52 259,3 253,1 021,60,2 619 71-6102 242 943,2 637,01 83003 718,45 242,18 544,21 481,51 026 562,21,2 559 81-7102 101 705,4 751,51 794,22 59846 007,60,1 000,11 268,6 965 086,94,2 369 91-8102 491 485,2 970,51 338,93 517,57 493,911 625,41 940,4 285,59,2 728 02-9102 238 165,5 410,31 161,04 710,15 9073 194,2 587,61,1 495 12-0202 693 646,1 030,4 574,42 461,26 496,98 665,01 016,3 085,69,1 197 22-1202 568,2 882,61 656,26 505,62,1 590,32,1 366,61 051,2 721,1 153,15,3 289 32-2202 532,73 406,66 024,25,1 349,24,2 315,93 387,6 532,2 437,74,5 005,1 42-3202 685,10,1 598,28,1 197,49,1 514,31 370,3 674,1 532,79,4 485,1 52-4202 280,24,1 234,76,2 329,41,4 385,51,4 886,06,2 202,41,2 931,97,1 547,33,2 913,80,2 287,16,1 840,27,1 085,09,1 211,50,2 020,072 &latoT dnarG # 2.0- 4.95 7.12 6.91 4.32- 2.21 8.82 0.6- 7.9- 1.7- 0.42- egatnecreP egnahc .71-6102 ecnis dedulcni neeb evah )sBDR( sdnoB detanimoneD eepuR :* .elbaliava tey ton si 62-5202 ni denoitcnas eb ot ylekil era taht slasoporp morf xepac sa tuo dekrow ton si 62-5202 rof egnahc tnec reP :# .desilitu/desilaer yllautca esoht morf tnereffid era yeht ,tnemtsevni degasivne ylno gnitaroprocni etna xe si etamitse ehT :&ARTICLE Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 Table A5: Size-wise Distribution of Projects Sanctioned by Banks/FIs: 2013-14 to 2024-25 Period Number and Less than ₹100 crore to ₹500 crore to ₹1000 crore to ₹5000 crore & Total Share of Projects ₹100 crore ₹500 crore ₹1000 crore ₹5000 crore above No. of Projects 306 115 25 21 5 472 2013-14 Per cent Share 8.3 20.0 13.9 29.1 28.7 100 (1,27,328) No. of Projects 223 65 18 19 1 326 2014-15 Per cent Share 9.0 16.6 14.6 47.8 12.0 100 (87,253) No. of Projects 214 76 34 21 1 346 2015-16 Per cent Share 8.6 20.9 26.0 38.5 5.9 100 (91,781) No. of Projects 287 180 29 40 5 541 2016-17 Per cent Share 5.8 23.3 11.9 41.7 17.4 100 (1,79,239) No. of Projects 263 149 28 42 3 485 2017-18 Per cent Share 5.2 21.0 10.8 43.8 19.1 100 (1,68,239) No. of Projects 220 110 39 36 4 409 2018-19 Per cent Share 4.8 17.0 17.0 39.6 21.6 100 (1,59,189) No. of Projects 150 84 45 36 5 320 2019-20 Per cent Share 3.3 11.9 18.6 37.4 28.8 100 (1,75,830) No. of Projects 128 52 15 24 1 220 2020-21 Per cent Share 5.5 16.8 14.2 53.5 10.0 100 (75,558) No. of Projects 201 125 37 36 2 401 2021-22 Per cent Share 5.6 19.7 20.0 46.9 7.9 100 (1,42,111) No. of Projects 267 158 50 64 8 547 2022-23 Per cent Share 3.9 13.8 13.9 41.3 27.1 100 (2,66,621) No. of Projects 484 265 107 77 11 944 2023-24 Per cent Share 4.6 16.6 20.0 37.1 21.7 100 (3,91,003) No. of Projects 502 234 86 75 10 907 2024-25 Per cent Share 5.2 14.8 17.1 37.2 25.8 100 (3,67,973) Note: i. Figures in brackets are total cost of projects in ₹crore. ii. Per cent share is the share in total cost of projects. Percentages may not total 100 due to rounding. 76 RBI Bulletin August 2025Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE Table A6: Purpose-wise Distribution of Projects Sanctioned by Banks/FIs during 2013-14 to 2024-25 Period Number and New Expansion & Diversification Others Total Share of Projects Modernisation No. of Projects 361 95 2 14 472 2013-14 Percent Share 65.2 20.1 - 14.7 100 (1,27,328) No. of Projects 203 92 2 29 326 2014-15 Percent Share 39.4 14.7 0.2 45.7 100 (87,253) No. of Projects 260 64 3 19 346 2015-16 Percent Share 73.6 14.3 0.1 12.0 100 (91,781) No. of Projects 429 97 4 11 541 2016-17 Percent Share 78.6 9.9 0.1 11.3 100 (1,79,249) No. of Projects 396 80 2 7 485 2017-18 Percent Share 89.0 9.5 0.1 1.5 100 (1,68,239) No. of Projects 309 80 - 20 409 2018-19 Percent Share 76.8 19.3 - 3.9 100 (1,59,189) No. of Projects 262 37 1 20 320 2019-20 Percent Share 79.8 13.7 - 6.4 100 (1,75,830) No. of Projects 181 38 1 - 220 2020-21 Percent Share 94.1 5.9 - - 100 (75,558) No. of Projects 312 88 1 - 401 2021-22 Percent Share 89.1 10.8 0.1 0.0 100 (1,42,111) No. of Projects 440 101 - 6 547 2022-23 Percent Share 93.1 6.1 - 0.8 100 (2,66,621) 2023-24 No. of Projects 767 167 4 6 944 Percent Share 89.1 8.7 0.1 2.2 100 (3,91,003) 2024-25 No. of Projects 734 162 5 6 907 Percent Share 91.6 7.8 0.1 0.5 100 (3,67,973) Note: i. Figures in brackets are total cost of projects in ₹crore. ii. Per cent share is the share in total cost of projects. Percentages may not total 100 due to rounding. iii. -: Nil/ Negligible. RBI Bulletin August 2025 77ARTICLE Private Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 78 RBI Bulletin August 2025 52-4202 ot 41-3102 :sIF/sknaB yb denoitcnaS stcejorP fo noitubirtsiD esiw-yrtsudnI :7A elbaT 52-4202 42-3202 32-2202 22-1202 12-0202 02-9102 91-8102 81-7102 71-6102 61-5102 51-4102 41-3102 yrtsudnI erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN 6.05 702 5.55 542 0.06 531 3.65 59 3.47 36 5.16 99 3.06 221 7.15 051 5.26 402 0.27 801 9.84 47 7.93 78 erutcurtsarfnI 7.93 641 4.42 931 3.02 35 0.92 85 3.94 53 9.23 74 8.62 87 5.63 711 4.54 071 1.75 29 2.24 56 1.53 07 rewoP )i - - 6.0 1 - - - - - - - - - - - - - 1 3.0 1 9.4 1 - 1 moceleT )ii 6.0 3 8.4 9 4.0 2 9.5 2 1.0 1 4.8 4 2.41 4 1.3 6 7.5 8 4.2 3 - - 8.0 1 stropriA & stroP )iii 2.0 8 0.0 4 8.0 3 2.0 2 2.1 5 4.0 4 7.5 31 4.0 2 7.3 6 2.4 4 6.0 2 1.1 5 tnemeganaM retaW & egarotS )vi dna hcetoiB ,lairtsudnI ,ZES )v 2.1 8 5.0 01 9.1 8 1.1 3 2.2 5 3.1 8 2.3 11 6.1 9 4.0 2 4.0 1 9.0 3 5.1 8 kraP TI 9.8 24 2.52 28 5.63 96 2.02 03 5.12 71 5.81 63 4.01 61 1.01 61 3.7 71 6.7 7 3.0 3 2.1 2 segdirB & sdaoR )iv 6.4 86 3.9 17 6.41 06 3.4 72 8.0 6 8.0 41 0.3 61 7.9 12 9.4 32 5.1 41 4.71 71 4.71 44 stcudorP lateM & lateM 6.5 75 0.8 65 0.4 53 4.7 22 8.4 72 4.11 44 3.2 62 3.5 93 0.21 06 8.1 62 0.4 92 1.2 72 noitcurtsnoC 6.4 82 4.4 51 1.1 9 0.4 5 1.0 1 - 4 1.0 1 2.0 6 2.0 9 2.0 2 2.0 7 0.2 9 scinortcelE & lacirtcelE 6.2 68 0.3 701 5.2 04 7.1 52 5.1 02 9.1 23 4.1 82 8.2 74 9.0 83 8.1 62 9.2 43 8.1 34 stcudorP dooF 9.7 42 9.2 33 3.2 61 4.3 02 6.1 9 3.1 21 9.2 91 4.11 32 1.2 01 6.1 11 6.2 7 0.1 51 sedicitseP & slacimehC 2.1 83 2.2 85 8.2 24 5.4 65 8.1 51 5.0 11 4.3 72 7.3 45 1.4 75 8.4 94 1.4 05 3.01 85 selitxeT 1.2 64 1.2 53 6.0 12 5.2 91 1.0 1 4.1 41 2.0 5 1.4 61 4.0 21 2.1 01 6.0 5 5.0 41 secivreS tropsnarT 8.1 32 6.1 82 1.1 71 0.1 7 - - 0.8 3 - - 4.0 1 5.0 2 0.2 2 4.3 1 5.0 1 stcudorP muelorteP dna ekoC 0.1 4 3.1 11 8.0 2 3.3 3 3.1 5 1.0 2 1.5 01 6.0 3 3.2 5 9.1 5 8.3 7 1.7 21 tnemeC 8.1 61 2.1 21 6.0 61 4.0 5 3.0 2 4.0 5 8.0 5 3.0 01 6.3 9 5.2 4 3.5 7 0.1 41 straP dna stnempiuqE tropsnarT 2.2 9 2.1 11 8.1 7 1.0 1 - - - - - - - 1 4.0 4 7.2 01 1.0 2 6.0 1 gniyrrauq dna gniniM 5.1 16 1.1 85 4.0 31 9.0 21 9.2 4 7.1 61 9.1 62 9.2 92 8.0 21 1.1 61 1.1 51 2.2 22 stnaruatseR dna sletoH 0.1 24 8.0 92 1.2 03 3.1 02 5.0 7 6.0 9 6.1 32 6.0 51 1.1 21 3.0 11 5.1 9 3.1 91 slacituecamrahP 5.1 43 7.0 52 1.1 02 3.2 91 3.0 7 7.0 21 6.2 51 8.1 81 1.1 22 - 1 1.0 2 7.0 01 secivres htlaeH & slatipsoH 9.1 53 7.0 42 8.0 31 8.0 21 1.2 71 3.0 5 5.0 5 5.2 01 2.0 8 5.0 4 8.0 8 3.0 9 tcudorp citsalP & rebbuR 9.3 01 6.0 4 2.1 4 6.0 2 - - - 1 7.0 2 - 1 - - - 1 - 1 1.0 3 erawtfoS TI 2.4 911 5.3 221 3.2 76 1.5 15 6.7 63 3.9 73 3.31 97 0.2 14 9.2 45 1.4 64 2.3 15 4.11 48 *srehtO 001 709 001 449 001 745 001 104 001 022 001 023 001 904 001 584 001 145 001 643 001 623 001 274 latoT 379,76,3 300,19,3 126,66,2 111,24,1 855,57 038,57,1 981,95,1 932,86,1 942,97,1 187,19 352,78 823,72,1 erorc₹ ni tsoc tcejorp latoT ,tnemniatretnE ,stcudorp deilla dna raguS ,yrettop & ssalG ,yrenihcam cirtcele-non dna cirtcele fo gnirutcafunaM ,seitivitca detaler & larutlucirgA ,stcudorp repap & repaP ekil seirtsudni esirpmoC :* .secivres rehto dna gnirutcafunam rehto ,gnihsilbup & gnitnirP ,secivres fo gnidarT .gnidnuor ot eud 001 latot ton yam segatnecreP .tcejorp fo tsoc latot ni erahs eht si erahs tnec reP .i :etoN .elbigilgeN/liN :- .iiPrivate Corporate Investment: Growth in 2024-25 and Outlook for 2025-26 ARTICLE RBI Bulletin August 2025 79 52-4202 ot 41-3102 :sIF/sknaB yb denoitcnaS stcejorP fo noitubirtsiD esiw-etatS :8A elbaT 52-4202 42-3202 32-2202 22-1202 12-0202 02-9102 91-8102 81-7102 71-6102 61-5102 51-4102 41-3102 etatS erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN erahS tnec reP stcejorP fo .oN 4.12 251 7.41 451 0.41 28 7.11 28 1.71 45 1.51 74 1.11 65 0.8 17 0.32 201 1.51 16 5.9 17 5.41 66 tarajuG 1.51 111 7.11 39 9.7 84 6.9 44 5.8 31 9.6 14 5.11 43 3.32 56 8.8 75 4.9 63 8.41 83 7.91 67 arthsarahaM 2.6 06 1.11 16 3.7 73 9.6 42 1.6 11 2.71 33 7.5 43 6.9 46 8.6 25 2.6 12 4.5 72 2.6 93 akatanraK 3.9 82 1.01 15 4.4 72 1.2 11 0.51 7 0.4 21 1.11 92 9.9 22 0.8 74 3.21 33 1.8 42 0.4 73 hsedarP arhdnA 1.7 87 6.7 96 2.61 54 7.21 33 7.31 03 4.5 42 8.4 82 4.2 03 7.3 22 5.2 51 4.5 02 1.1 12 hsedarP rattU 6.4 81 7.6 32 8.11 21 2.2 9 1.0 2 9.1 6 4.1 9 0.3 5 1.3 6 1.3 6 9.51 5 7.11 01 ahsidO 8.2 24 1.4 04 9.1 03 4.3 61 9.1 9 0.4 21 1.9 62 9.1 71 5.5 15 8.3 01 - - - - anagnaleT 3.7 54 6.3 16 1.3 22 6.21 23 1.71 12 8.3 32 7.7 12 3.6 33 8.2 32 9.0 01 1.11 92 4.1 42 nahtsajaR 3.1 7 4.3 71 9.1 21 8.0 6 2.0 1 4.9 4 5.0 2 3.0 3 0.0 1 3.0 5 7.0 2 3.0 4 dnahkrahJ 7.2 14 4.3 65 0.5 53 2.4 81 8.2 91 2.1 01 6.1 21 7.0 01 5.7 81 0.7 12 9.3 41 1.6 03 hsedarP ayhdaM 1.1 42 3.3 62 4.1 8 8.0 4 2.1 3 2.0 6 9.0 6 8.4 7 0.4 51 6.4 8 4.7 8 7.01 61 hragsittahhC 7.4 37 0.3 38 7.4 44 8.8 04 7.0 7 3.8 82 8.21 23 6.6 82 4.4 32 3.9 62 9.2 72 4.5 33 udaN limaT 9.0 11 6.2 31 6.1 6 4.3 5 0.0 1 4.3 6 4.0 6 1.0 3 2.0 4 2.0 6 1.0 4 2.0 6 rahiB 3.2 43 3.2 82 0.1 61 6.2 11 4.0 3 9.0 7 1.1 31 8.1 41 7.1 81 1.3 41 3.1 9 2.1 21 lagneB tseW 8.3 45 9.1 63 1.3 32 2.0 5 2.0 5 3.0 3 4.0 11 0.2 8 1.0 3 2.0 9 1.0 2 2.5 01 rimhsaK & ummaJ 5.1 82 6.1 43 5.2 12 2.2 51 7.0 4 8.0 9 9.1 51 2.2 13 1.2 92 7.1 11 3.0 6 5.1 82 bajnuP 6.0 02 5.1 52 0.1 41 0.2 41 8.7 51 4.3 02 7.1 81 5.0 12 6.1 31 6.3 61 9.1 11 1.1 51 anayraH 3.0 41 2.1 01 4.0 21 6.0 3 1.0 2 5.0 3 3.1 8 2.1 6 3.0 5 1.0 1 1.0 2 4.0 5 ihleD 2.1 41 9.0 31 7.0 6 0.0 2 4.4 3 3.0 1 2.0 4 8.0 5 6.0 01 4.0 4 2.0 2 3.0 4 massA 1.0 9 3.0 01 2.2 11 2.1 7 2.0 4 1.0 6 3.0 7 3.2 8 0.0 1 4.1 8 1.0 3 8.1 3 hsedarP lahcamiH 3.0 21 2.0 11 9.0 21 2.4 5 - - 0.1 3 9.0 6 1.0 3 7.2 6 1.0 4 2.0 4 0.0 3 alareK 6.0 3 1.0 4 8.0 3 0.3 3 - - 1.0 2 8.1 3 9.1 2 6.0 3 0.0 1 - - - - aoG 3.0 41 1.0 8 1.0 5 4.0 2 1.0 2 1.0 5 4.0 9 4.0 6 4.0 11 1.0 2 2.0 5 1.0 5 dnahkarattU 5.4 9 4.4 21 5.5 01 0.4 7 4.1 2 7.11 8 8.9 51 5.7 61 8.11 71 5.31 31 5.9 01 9.6 12 # etatS-itluM 1.0 6 3.0 6 3.0 6 3.0 3 3.0 2 0.0 1 7.1 5 4.2 7 3.0 4 1.1 5 9.0 3 2.0 4 *srehto 001 709 001 449 001 745 001 104 001 022 001 023 001 904 001 584 001 145 001 643 001 623 001 274 latoT 379,76,3 300,19,3 126,66,2 111,241 855,57 038,57,1 981,95,1 932,86,1 942,97,1 187,19 352,78 823,72,1 )erorc₹ ni( stcejorP fo tsoC latoT .setats lareves revo stcejorp esirpmoC :# .seirotirret noinu/setats gniniamer esirpmoC :* .gnidnuor ot eud 001 latot ton yam segatnecreP .tcejorp fo tsoc latot ni erahs eht si erahs tnec reP .i :etoN .elbigilgeN/liN :- .iiEquity Mutual Funds: Transforming India’s Savings Landscape ARTICLE Equity Mutual Funds: household sector’s gross financial savings increased from 0.9 per cent in 2011-12 to 6 per cent in 2022- Transforming India’s Savings 23 (Chart 1a). MFs have emerged as the preferred Landscape vehicle for household investors to invest in equity markets1 (Chart 1b). by Mayank Gupta, Satyam Kumar, Over the past few decades, MFs in India have Abhinandan Borad, Subrat Kumar Seet experienced considerable popularity, attributable and Pratibha Kedia^ to rise in income levels, increasing levels of financial literacy, young demographic composition, This article examines the determinants of equity the widespread growth of the digital ecosystem mutual fund flows in India, highlighting the shift and internet connectivity, and the success of the in retail investor behaviour toward equity-oriented marketing initiatives led by the Association of assets over the past decade. Using machine learning Mutual Funds in India (AMFI) leading into buildup techniques, the empirical analysis identifies increasing of trust. Assets under management (AUM) of the MF financial inclusion (proxied by demat accounts), fixed industry have grown from ₹6.1 lakh crore at end- deposit rates, and business confidence as the top three March 2010 to ₹65.7 lakh crore at end-March 2025 at influential factors shaping equity mutual fund flows. a compounded annual growth rate (CAGR) of 17.1 per Granger causality analysis further suggests that real cent. Monthly flow through systematic investment GDP growth helps forecast these flows, reflecting how plans (SIPs) has been recording fresh lifetime highs, economic performance influences investor behaviour. crossing the ₹27,000 crore mark in June 2025, despite The article underscores the growing maturity and long- heightened volatility in Indian equity markets in the term orientation of retail investors in India. Despite recent period due to geopolitical developments and recent growth, India’s mutual fund industry remains trade related uncertainties. relatively small compared to those of advanced economies, MFs are seeing higher growth in new SIP indicating significant scope for future expansion. accounts from smaller towns (beyond 30 or B-30 Introduction centers) compared to the top 30 (T302) cities3 along Retail investors have been increasingly with greater participation from women - their share preferring equity investments over traditional in industry assets has expanded from 15 per cent in saving instruments, which is reshaping the financial 1 The current Household Financial Savings Data accounts only for primary market flows into equities. Securities and Exchange Board of India (2024) landscape in India. The substantial growth of mutual undertook an extended analysis by incorporating secondary market flows funds (MFs) would unquestionably be a prominent and introducing certain methodological refinements. Even with these adjustments, the findings indicate that flows into mutual funds continue highlight if one were to outline the significant to significantly surpass the combined flows into equities through both primary and secondary markets. developments in India’s financial sector during 2 T30 refers to the top 30 geographical locations in India and B30 the twenty-first century. The share of MFs in the refers to the locations beyond the top 30. The list of T30 cities can be accessed at https://www.amfiindia.com/research-information/aum-data/ listoftop30cities ^ The authors are from the Department of Economic and Policy Research. 3 https://www.business-standard.com/markets/stock-market- The views expressed in this article are those of the authors and do not news/sip-soars-beyond-city-limits-small-towns-lead-in-account- represent the views of the Reserve Bank of India. additions-123112600539_1.html RBI Bulletin August 2025 81ARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape Chart 1: Financialisaton of Household Savings a. Share of MFs in the gross financial savings of the b. Flow of Financial Assets and Liabilities of Households household sector Towards Equities (Direct Exposure) and MFs (Per cent) (₹ Thousand crore) 10 9 8 7 6 5 4 3 2 1 0 Sources: MoSPI, RBI and Author’s calculations. March 2017 to nearly 21 per cent as of December 2023. retail investors and the subsequent implications for Another encouraging facet of this change has been the the domestic financial markets. fact that the pace of growth of women’s participation Against this background, the present study is more prominent in smaller towns - the share of attempts to investigate the key determinants of flows women’s folios and assets in B-30 cities has increased into equity MFs in India using machine learning from 15 per cent and 17 per cent to 18 per cent and techniques like random forest. When the data 28 per cent, respectively, during the same period4. exhibits non-linear and interacting effects, random The AUM of women investors in MFs in India more forest is capable of managing complex interactions than doubled from ₹4.59 lakh crore in March 2019 between features much better than linear models. to ₹11.25 lakh crore in March 20245. At a time when This exercise involves exploring various potential foreign portfolio investor’s (FPIs) share in the equity channels, such as the comparative returns on market is decelerating albeit slowly, the ownership of alternative investment avenues, increasing MFs in domestic equity markets is at an all-time high. financialisation of savings, and the overall outlook This trend is expected to strengthen6, given the rapid on the financial markets and business environment. projected growth of the domestic MF industry in the coming years. In such an environment, it is imperative The rest of the article is organised as to closely examine the factors influencing the inflow follows. Section II discusses stylised facts on equity of funds into MFs, particularly into equity-oriented MFs and recent trends. Section III reviews the extant MFs, which have attracted substantial interest from literature on equity MFs. Section IV covers the 4 https://www.amfiindia.com/Themes/Theme1/downloads/AMFI_ analysis of determinants of flows into equity MFs womensDay_Mar2024.pdf and an assessment of the link between MF flows and 5 https://www.amfiindia.com/Themes/Theme1/downloads/ AMFIFactbook%202024.pdf real Gross Domestic Product (GDP). Lastly, section 6 https://www.mordorintelligence.com/industry-reports/india-mutual- fund-industry V presents the concluding observations. 82 RBI Bulletin August 2025 21-1102 31-2102 41-3102 51-4102 61-5102 71-6102 81-7102 91-8102 02-9102 12-0202 22-1202 32-2202 300 250 200 150 100 50 0 2020-21 2021-22 2022-23 2023-24 Mutual Funds EquityEquity Mutual Funds: Transforming India’s Savings Landscape ARTICLE II. Stylised Facts of the MF Industry in India Equity MFs have grown faster than non-equity funds, supported by the stellar performance of The increasing interest in MFs can be gauged domestic equity markets and sustained inflows into by the rise in the number of investor accounts, equity-oriented funds from retail investors, with which have grown nearly six times since December equity AUM rising from ₹2.1 lakh crore at end-March 2014, reaching 23.5 crores in March 2025. Notably, 2010 to ₹34.5 lakh crore at end-March 2025 (Charts 91. 7 per cent of these accounts belong to retail 4a and 4b). investors (Charts 2a and 2b). The number of The tilt of retail investors towards equities is unique MF investors crossed the five-crore mark in also reflected in the fact that around two-thirds of all 20247. MF accounts are focused on equity-oriented assets. MFs are emerging as a potential competitor There has been a simultaneous growth in SIPs along to bank deposits in terms of investment avenue, with the rise in the number of investor accounts. especially among the aspirational middle class in Indian MFs had almost 9.2 crore SIP accounts at the India. The ratio of AUM of the MF industry to total end of June 2025 through which investors regularly deposits8 has more than doubled from around 10 per invested in Indian MF schemes. While growth cent at end-March 2014 to 23.8 per cent at end-March in the number of investor accounts indicates the 2024 (Chart 3a). Despite the recent high-growth increasing popularity of MFs among small investors, phase, MFs still have a vast territory to capture. MFs’ a secular increase in SIP investments is a testament assets in advanced economies have a higher share as to the growing maturity of retail investors (Chart 5a). a per cent of their GDPs than in India (Chart 3b). Two polarising trends i.e., preference for short- Chart 2: MF Industry Accounts a. Increase in Investor Accounts b. MF Accounts Across Investor Types (Crore) (Per cent) 28 23 23.5 18 13 8 3 -2 Source: AMFI. 7 https://www.business-standard.com/markets/mutual-fund/mf-investor-count-crosses-50-million-after-10-million-additions-in-a-year-124102501213_1. html 8 Deposits include deposits with scheduled commercial banks (SCBs), public deposits with non-banking financial companies (NBFCs) and urban-co- operative banks. RBI Bulletin August 2025 83 41-raM 51-raM 61-raM 71-raM 81-raM 91-raM 02-raM 12-raM 22-raM 32-raM 42-raM 52-raM 0.6 7.8 91.7 Retail Investors HNIs InstitutionsARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape Chart 3: MFs Gaining Popularity Among Retail Investors a. MF AUM as a per cent of Total Deposits in India b. MF Assets to GDP (Per cent) (Per cent) 30 25 20 15 10 5 0 Sources: RBI, SEBI, World Bank and Authors’ calculations. term trading via equity derivatives and long-term cent of equity MF assets for a period greater than investments through SIPs have gained traction 24 months (as at end-March 2025) (Chart 5b). The simultaneously. It is noteworthy that while there stickiness of retail investors with equities is showing have been concerns over retail investors being on signs of strengthening as this share (retail investors the losing side of derivatives trading9, a segment of holding equity assets for more than two years) stood retail investors has shown more patience, which is at 44.9 per cent and 53.3 per cent in end-March 2023 reflected by the fact that retail investors hold 61 per and end-March 2024, respectively. MFs seem to 9 https://www.sebi.gov.in/reports-and-statistics/research/jul-2025/comparative-study-of-growth-in-equity-derivatives-segment-vis-vis-cash-market-after- recent-measures_95105.html 84 RBI Bulletin August 2025 41-raM 51-raM 61-raM 71-raM 81-raM 91-raM 02-raM 12-raM 22-raM 32-raM 42-raM 150 100 50 0 2102 3102 4102 5102 6102 7102 8102 9102 0202 Brazil Canada China France Germany India United Kingdom United States Chart 4: Growth in Equity-oriented MFs has Outpaced Debt Funds a. Asset Under Management of MFs b. Net Inflows in Mutual Funds (₹ Lakh crore) (₹ Thousand crore) 40 35 30 25 20 15 10 5 0 Note: Others include balance/hybrid/solution-oriented schemes. Sources: AMFI and Author’s calculations. 90-raM 01-raM 11-raM 21-raM 31-raM 41-raM 51-raM 61-raM 71-raM 81-raM 91-raM 02-raM 12-raM 22-raM 32-raM 42-raM 52-raM 500 300 400 250 300 200 200 150 100 100 0 50 -100 -200 0 -300 -50 Equity Non-Equity 1102 3102 5102 7102 9102 1202 3202 Debt Equity Others (RHS)Equity Mutual Funds: Transforming India’s Savings Landscape ARTICLE Chart 5: Growing Maturity of Retail Investors a. SIP Contribution b. Holding period of MF investors (₹ crore) (Per cent) 3,50,000 3,00,000 2,50,000 2,00,000 1,50,000 1,00,000 50,000 0 Note: The holding period includes data pertaining to all categories of investors. Data as at end-March 2025. Source: AMFI. have successfully persuaded small investors to stay small cities are in the early stages of developing a taste invested for the longer term. for equities, and much of the volume still originates from a handful of states, visible changes can be seen. As discussed above, there are signs of increasing Regarding equity-oriented MFs, Maharashtra alone preference for equities beyond metro cities, as seen accounts for over a quarter of the AUM. Densely by the rise in the number of fresh demat account populated northern and eastern states account for a openings from tier-2 and tier-3 towns10. Although relatively lower share (Chart 6a). However, a glance 10 The data may slightly overstate the trend due to migrant workers not updating their addresses. RBI Bulletin August 2025 85 71-6102 81-7102 91-8102 02-9102 12-0202 22-1202 32-2202 42-3202 52-4202 60 50 40 30 20 10 0 0-1 1-3 3-6 6-12 12-24 >24 Month Month Month Month Month Month Equity Non-Equity Chart 6: Geographical Distribution of AUM of Equity Oriented Mutual funds a. Average Assets Under Management of b. Growth Rate of Equity Oriented Mutual Funds Between Equity Oriented Mutual Funds FY:2015 and FY:2025 (₹ crore) (per cent) Note: Darker hues indicate higher values. Data for the UT of Ladakh has been merged with Jammu and Kashmir. Sources: AMFI and Author’s calculations.ARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape at the growth rate in AUM shows that laggard states Chart 8: Aggregate Holding of MFs (March 2025) have shown a tendency to catch up (Chart 6b). The market regulator and the industry body have proactively promoted the deepening of MFs beyond T30 cities. As of end-June 2025, 18 per cent of the MF industry’s assets came from B30 locations. MFs could charge an additional expense ratio of 0.3 per cent on fresh inflows of up to ₹2 lakhs from B30 cities to provide distributors a higher commission Equity-Indian Listed Equity-Foreign Central/State Govt.Bonds Corporate Bonds to popularise MFs in smaller towns11. Despite the Certificate of Deposit Commercial Paper growth of digital platforms in recent years that Mutual Funds Cash enable direct investments in MFs, retail investors Derivatives Others tend to invest through distributors who provide Note: Others include equity-Indian unlisted, treasury bills, fixed, term and margin deposits, commodity, Alternative Investment Funds and Reits/Invits. administrative assistance and guidance. Only 27 per Source: Prime Database. cent of the retail investors chose to invest directly Equities are the most significant investment (29 per cent of equity scheme assets came through class for MFs, with the banking and finance sector the direct route as of end-June 2025). Corporate accounting for more than one-fourth of MF equity houses and HNIs are concentrated in large cities, investments (Chart 8). and thus, T30 locations account for most of the non- With increasing flows towards MFs, their equity assets (Chart 7). ownership in domestic equities has grown considerably over the last decade. The shareholding of MFs in Chart 7: Asset Mix (end-June 2025) companies listed on the National Stock Exchange (Per cent) 120 (NSE) has risen from 3.7 per cent at end-March 2010 to 10.4 per cent at end-March 2025 (Chart 9). 100 14 With increasing shareholding in companies 80 and having substantial voting power, MFs have a 46 greater responsibility to ensure that the companies 60 they invest in, abide by corporate governance principles. To ensure that MFs do not shy away from 40 86 their stewardship role and vote in the best interest 54 of their unitholders, effective April 1, 2021, SEBI 20 has mandated MFs to vote on several resolutions ranging from corporate governance to changes in 0 B30 T30 capital structure12 of the companies they invest in. Equity-oriented schemes Non-equity oriented schemes Following the change in guidelines, MFs have shown Source: AMFI. more active and diverse participation in voting on 11 SEBI has stopped the incentive scheme from March 1, 2023, till further directions due to misuse, inconsistencies and deficiencies in the manner 12 https://www.sebi.gov.in/legal/circulars/mar-2021/circular-on-guidelines- of implementation of the incentive mechanism. for-votes-cast-by-mutual-funds_49405.html 86 RBI Bulletin August 2025Equity Mutual Funds: Transforming India’s Savings Landscape ARTICLE resolutions has declined from 21.5 per cent in 2014- Chart 9: Shareholding of MFs in Companies Listed on NSE has increased 15 to 0.2 per cent in 2024-25. (Per cent) 25 Another notable trend has been the growing 20 interest in passive investments worldwide. As per Morningstar, passive investments represent 43.5 15 10.4 per cent of worldwide long-term assets as of 2024, a 3.2 per cent increase from year-end 202313. Passive 10 funds have also found favour amongst domestic 5 investors, with the share of passive funds as a per cent of industry assets rising from 6.1 per cent in 0 March 2019 to 17 per cent in March 202414. During 2024-25, passive funds/Exchange Traded Funds (ETFs) witnessed net inflows of ₹1.4 lakh crore, led by inflows in domestic ETFs and domestic index Source: Prime Database. funds. Equity-oriented ETFs have the largest share corporate resolutions, which is also reflected in a supported by institutional flows15 (Chart 10). greater share of voting ‘Against’ the resolution. Share MFs also provide opportunities for domestic of MFs voting ‘Against’ a corporate resolution has investors to get exposure to international equities increased from 4.4 per cent in 2014-15 to 11.9 per and reap diversification benefits. The trend of cent in 2024-25 while MFs abstaining from voting on looking beyond domestic equities picked up during 13 https://www.morningstar.com/business/insights/research/global-asset-flows-report 14 https://www.amfiindia.com/Themes/Theme1/downloads/AMFIFactbook%202024.pdf 15 EPFO invests in equity markets through ETFs replicating BSE-SENSEX and NIFTY-50 indices. RBI Bulletin August 2025 87 9002-peS-03 0102-raM-13 0102-peS-03 1102-raM-13 1102-peS-03 2102-raM-13 2102-peS-03 3102-raM-13 3102-peS-03 4102-raM-13 4102-peS-03 5102-raM-13 5102-peS-03 6102-raM-13 6102-peS-03 7102-raM-13 7102-peS-03 8102-raM-13 8102-peS-03 9102-raM-13 9102-peS-03 0202-raM-13 0202-peS-03 1202-raM-13 1202-peS-03 2202-raM-13 2202-peS-03 3202-raM-13 3202-peS-03 4202-raM-13 4202-peS-03 5202-raM-13 FII MF Insurance companies Retail Chart 10: Growth of Passive Funds a. Share of Passive Funds b. Net Inflows in Passive Funds in 2024-25 (Share of industry assets in Per cent) (₹ Thousand crore) 18 17.1 17 16 14 13.3 12 9.8 10 8 7.3 6.1 6 4 2 0 Note: Other passive funds include income/debt-oriented ETFs, gold ETFs, silver ETFs, fund of funds investing overseas in passive funds, equity-oriented index funds (international index funds), equity-oriented ETFs (international ETFs), income/debt-oriented index funds (other than target maturity index funds), fund of funds investing overseas in active funds, income/debt oriented index funds (target maturity index funds). Sources: AMFI and Author’s calculations. 91-raM 02-raM 12-raM 22-raM 32-raM 42-raM 70 60 50 40 30 20 10 - detneiro ytiuqE citsemoD( sFTE )sFTE detneiro ytiuqE sdnuF xednI xednI citsemoD( )sdnuF srehtOARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape Chart 11: Overseas Investments through MFs a. Fund of Funds Investing Overseas b. Outward Remittances under LRS for Investment in (₹ Crore) Equity/Debt by Resident Individuals 12000 30000 (US$ million) 10000 25000 8000 20000 6000 4000 15000 2000 10000 0 5000 -2000 -4000 0 Net mobilization AUM (RHS) Sources: SEBI and RBI. the COVID-19 pandemic. However, it has moderated outflows. The capacity of MFs to influence domestic in recent periods amid outperformance by domestic markets has strengthened. Empirical evidence equity markets coupled with the MF industry suggests that MF flows affect equity market returns nearing the maximum permissible ceiling limit in the small and midcap segments18. The broader for overseas investments (Chart 11a). Restrictions markets have witnessed increasing investor interest on overseas investing via MFs may inadvertently over the last few years, with midcap and smallcap push investors towards alternate routes, such as funds accounting for almost one-fifth of the net the Liberalised Remittance Scheme (LRS), leading to potentially riskier exposures in international equities (Chart 11b). The re-categorisation of MF schemes has provided greater clarity to investors about the schemes’ final investment universe. Flexi-cap16 funds have witnessed substantial net inflows among open-ended equity schemes, likely due to the greater flexibility provided by these schemes, while sectoral/thematic funds17 gained traction in 2024-25 (Chart 12). Sustained MF inflows have helped cushion the equity market against volatility triggered by FPI 16 SEBI introduced this category in November 2020 as an an open-ended dynamic equity scheme investing across large cap, mid cap, small cap stocks. 17 https://www.cnbctv18.com/personal-finance/mutual-funds-thematic- schemes-rise-in-inflows-returns-should-you-invest-19424553.htm 18 https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=22189 88 RBI Bulletin August 2025 91-8102 02-9102 12-0202 22-1202 32-2202 42-3202 52-4202 1600 1400 1200 1000 800 600 400 200 0 91-8102 02-9102 12-0202 22-1202 32-2202 42-3202 Chart 12: Inflows in Open-ended Equity Schemes (₹ Thousand crore) 50 40 30 20 10 0 -10 -20 Multi Cap Fund Large Cap Fund Mid Cap Fund Small Cap Fund Sectoral/Thematic Funds Others Flexi Cap Fund Large & Mid Cap Fund Note: Others include dividend yield fund, value fund/contra funds, focused fund, and Equity Linked Savings Scheme (ELSS). Source: AMFI. 9102-nuJ 9102-peS 9102-ceD 0202-raM 0202-nuJ 0202-peS 0202-ceD 1202-raM 1202-nuJ 1202-peS 1202-ceD 2202-raM 2202-nuJ 2202-peS 2202-ceD 3202-raM 3202-nuJ 3202-peS 3202-ceD 4202-raM 4202-nuJ 4202-peS 4202-ceD 5202-raMEquity Mutual Funds: Transforming India’s Savings Landscape ARTICLE III. Literature Review Chart 13: Flows in Midcap and Smallcap Schemes (Per cent of total (cid:19)lows) Understanding the factors that influence flows 40 33.9 into mutual funds is important because these flows 30 28.6 28.8 reflect consumer saving patterns, individual wealth, 20 19.9 and investment decisions. They also impact fund 16.1 managers’ incentives, reveal investor behaviour, and 10 influence the overall efficiency of financial markets 0 (Ferson and Kim, 2012; Kopsch et al., (2015)). Past -10 studies on MF flows have employed both micro -20 and macro approaches. The micro approach focuses -26.1 on analysing flows into individual MFs, while the -30 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 macro approach examines the aggregate inflows and Notes: Flows data pertains to open-ended equity-oriented schemes only as a per outflows across the MF industry as a whole (Alexakis cent of total flows. There were net outflows from open-ended equity-oriented schemes in 2020-21, of which 26.1 per cent were from midcap and small-capped et al., 2005,2013; Remolona et al., 1997; Edward and schemes. Sources: SEBI and Author’s calculations. Zhang, 1998; Watson and Wickramanayke, 2012; Jank, 2012; Fong et al., 2018). inflows into open-ended equity-oriented MFs in In the Indian context, studies have focused 2024-25 (Chart 13). The market value of Small and on analysing flows into individual funds as well as Midcap stocks held by MFs stood at around ₹14 lakh overall flows in the MF industry in the case of both crore19 in end-March 2025, accounting for more than debt and equity funds (see Kumar et al., 2020; Mishra, one-fourth of the equity holdings of MFs. Given 2011; Gupta et al., 2022). Madhumathi et al., (2012) relatively low liquidity in the Small and Midcap examines the factors influencing equity MF flows in segments, MFs could be subject to large liquidity India. This study covers the period from July 2005 to risks from redemption pressures in case of sharp August 2012, uses linear AutoRegressive Integrated downward adjustments, which could then put Moving Average (ARIMA) models, and finds volatility, pressure on other segments of the financial markets. volume, dividend yield, exchange rate, investor To protect investor interest of small and midcap behaviour, US market returns, call rates and past funds, SEBI has asked MFs to put in place appropriate fund flows as factors influencing net flows in equity and proactive measures to protect investors by using MFs. A recent study by Kumari and Debnath (2022) tools like moderating inflows, portfolio rebalancing investigates the determinants of MF flows with and ensuring that investors are protected from the reference to BSE SENSEX using monthly data from first mover advantage of redeeming investors in January 2012 to December 2020. The authors find case of mass redemptions. Furthermore, the market that stock returns and volatility have an asymmetric regulator has regularised liquidity stress tests for impact on MF flows and foreign institutional these equity schemes, an exercise already conducted investors (FIIs) have opposite trading pattern i.e., FII regularly for debt schemes.20 purchases lead to MF sales and vice versa. 19 As per calculations using data from Prime MF database. In recent years, equity MF schemes in India 20 https://www.msn.com/en-in/news/other/latest-stress-test- have consistently seen higher net inflows than debt shows-this-about-small-cap-mutual-funds-check-details-here/ar- AA1FMddc?ocid=BingNewsSerp schemes since 2017, except in 2020, indicating a RBI Bulletin August 2025 89ARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape shift in investor preference. For the current study, It is a non-parametric supervised machine learning the macro approach is chosen to gauge general algorithm and reduces variance, resulting in a stable shifts in investor preference and behaviour rather and reliable model. It is robust to outliers in the than specific fund-to-fund shifts by looking into the data due to the nature of averaging predictions from determinants of equity MF flows. multiple trees and can also handle missing values. IV. Data and Methodology The importance of variables is a crucial aspect of the random forest model, offering insights into The following variables with a monthly the contribution of each feature to predictive frequency are used to estimate the drivers of flows performance. To evaluate variable importance, we into equity MFs (Table 1). The data spans from April 2015 to November 2024. employ both the permutation test and Shapley values. The permutation test involves randomly Given the diverse and dynamic nature of factors shuffling the values of a specific predictor to break influencing mutual fund flows, machine learning its relationship with the outcome variable, while algorithms are well-suited for uncovering the most keeping all other variables unchanged. The resulting influential predictors. Unlike traditional linear increase in prediction error indicates the importance models, which may miss complex interactions or non- of that variable-larger increases suggest a greater linear patterns in the data, machine learning algorithm contribution to the model’s accuracy. In contrast, such as random forest can effectively handle such Shapley values, derived from cooperative game complexities without assuming a specific functional form. Random Forest is an ensemble machine- theory, measure each feature’s average marginal learning method constructed based on individual tree contribution to the prediction across all possible classification or regression (Breiman 2001). Ensemble combinations of features. This approach provides a learning combines multiple models to create a more consistent and locally accurate estimate of variable robust and accurate predictive model. In the case of importance, effectively capturing interactions and random forest, individual models are decision trees. dependencies among features. Table 1: Description of Variables Variable Definition Source Flows Monthly net flows are normalised by the previous month’s net AUM to control for the AMFI increasing trend in flows (Remolona et al., 1997). Sensex Returns Monthly per cent change in BSE Sensex (with one month lag). Bloomberg VIX NIFTY Volatility (Investment Risk) Bloomberg Term Spread 10-Year G-sec bond yield net of 3-month G-sec yields. Bloomberg Risk Spread 10-Year AAA corporate bond yield net of 10-year G-sec yields. Bloomberg Dividend Yield Financial ratio computed as (dividend/stock price). Bloomberg Inflation Y-o-Y per cent change in consumer price index (CPI) Bloomberg Fixed Deposit Rate Term deposit rate greater than one year DBIE, RBI (Relative Market Returns) Business Confidence Index This standardized index, based on manufacturing surveys, signals future outlooks for OECD production, orders, and inventories. Values above 100 indicate optimism; below 100, pessimism. Demat Accounts Number of Investor Accounts (Lakhs) SEBI Source: Author’s compilation. 90 RBI Bulletin August 2025Equity Mutual Funds: Transforming India’s Savings Landscape ARTICLE To understand the determinants of equity MF with volatility. Thus, higher volatility may reduce flows, variables are chosen based on cues from Kopsch flows into equity MFs. According to Jank (2012), et al., (2015) as well as other domestic factors such higher term spreads and risk spreads tend to result as fixed deposit rates, business confidence index in lower flows in equity MFs. The author notes and demat account openings. Fixed deposit rates are that just before or during a recession, there is a chosen as a substitute for the return/relative market surge in dividend yield due to falling stock prices. return from equity MFs. A persistently low fixed Simultaneously, investors become less willing to deposit rate for an extended period might eventually hold equity positions. Therefore, a negative relation between dividend yield and flows in equity MFs might lead people to search for other asset classes that offer be observed. The direction of flows with inflation is higher returns, thereby increasing equity MF flows. not certain. Equities provide a hedge against inflation The return on BSE Sensex has beaten fixed deposit in emerging market economies (Al-Nassar and Bhatti, returns in 10 out of the last 15 financial years with 2019; Spyrou, 2019). However, higher inflation the Compounded Annual Growth Rate (CAGR) of might lead people to hedge by investing in real assets Sensex Total Return Index at 12 per cent vis-à-vis rather than stocks (Park et al., 1990; Kopsch et al., 7 per cent for term deposits between 2010-11 and 2015). In this analysis, using both the permutation 2024-25 (Chart 14). test and Shapley values, the primary focus is on Demat account opening can be considered a proxy identifying which variables significantly influence for financial inclusion and increasing preference mutual fund flows, rather than determining the for equities. This should lead to additional flows to direction (positive or negative) of their effects. The equity-oriented products. The business confidence objective is to assess the relative importance of index is expected to impact flows, as it is an each predictor in driving model performance. The indicator of future growth, and the VIX is associated analysis21 reveal the top five variables ranked by importance (Chart 15). Chart 14: Sensex versus Term Deposit Returns (Per cent) The results from both the permutation test and 80 Shapley values indicate that demat accounts, fixed 60 deposit rates, and the business confidence index are the top three influential predictors of equity mutual 40 fund flows. This suggests that investor access to 20 markets (as proxied by demat accounts), alternative 0 saving options (such as fixed deposit rates), and -20 optimism about the business environment (as measured by the business confidence index) play -40 a significant role in driving flows to equity mutual funds. While both methods broadly agree on the most Sensex Returns Term Deposit Rates Note: Sensex returns for the financial year are calculated using the BSE Sensex Total Return Index. Term deposit rates pertain to the term deposit rates (1 to 3 years) of five major banks. Sources: RBI and Bloomberg. RBI Bulletin August 2025 91 11-0102 21-1102 32-2102 41-3102 51-4102 61-5102 71-6102 81-7102 91-8102 02-9102 12-0202 22-1202 32-2202 42-3202 52-4202 21 The dataset is standardised to have a mean of zero and a standard deviation of one. An 80–20 split is then employed to divide the data into training and testing sets.ARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape Chart 15: Variable Importance obtained from Random Forest a. Permutation Test b. Shapley Values (Importance Score (RMSE Increase)) (Mean Absolute Shapley Values) 0.35 0.45 0.3 0.4 0.35 0.25 0.3 0.2 0.25 0.15 0.2 0.15 0.1 0.1 0.05 0.05 0 0 Demat Fixed Business Sensex Dividend Demat Fixed Business Sensex Term Accounts Deposit Confidence Returns Yield Accounts Deposit Confidence Returns Spread Rate Index Rate Index Note: Left panel plots the variable importance derived from Permutation Importance, while right panel plots the variable importance derived from Shapley Values. Only the top 5 variables as per the specifed criteria are selected for each mode. Source: Author’s calculations. important variables, the permutation test highlights Further, to understand the link between flows dividend yields as an important factor, whereas into equity MFs and the dynamics of the real economy Shapley values emphasise term spreads. This i.e., whether equity MF flows contain information divergence reflects how different methods capture about real GDP growth or vice versa in the case of variable importance: permutation importance focuses India, an empirical exercise is undertaken, and on the marginal impact on prediction accuracy, while the analysis suggests that equity MF flows do not Shapley values also account for interactions and contain any information about real GDP growth22. shared contributions among variables. The period of analysis is from Q1: 2012-13 to Q3: 2024-25 (Chart 16)23. Chart 16: GDP Growth and Equity MF Flows (Growth Rate, Flows Scaled by AUM) A reduced-form bivariate VAR model is used. 30 12 The results of the Granger Causality test between 10 20 flows and real GDP growth are reported in Table 2. 8 The null hypothesis that “flows do not Granger-cause 10 6 real GDP growth” fails to be rejected, suggesting that 4 the past value of flows does not contain significant 0 2 information about real GDP growth. However, the null -10 0 hypothesis “Real GDP growth does not Granger-cause -2 flows” is rejected at five per cent level of significance. -20 -4 Thus, past values of real GDP growth contain useful -30 -6 information for forecasting equity mutual fund flows. 22 Net flows are normalised by the previous month’s net AUM to control GDP Growth Mutual Fund Flows (RHS) the increasing trend in flows (Remolona et al., 1997). Sources: Bloomberg and AMFI. 23 The correlation coefficient between the two series is 0.17. 92 RBI Bulletin August 2025 21-nuJ 21-ceD 31-nuJ 31-ceD 41-nuJ 41-ceD 51-nuJ 51-ceD 61-nuJ 61-ceD 71-nuJ 71-ceD 81-nuJ 81-ceD 91-nuJ 91-ceD 02-nuJ 02-ceD 12-nuJ 12-ceD 22-nuJ 22-ceD 32-nuJ 32-ceD 42-nuJ 42-ceDEquity Mutual Funds: Transforming India’s Savings Landscape ARTICLE indirectly, also warrants more efforts toward investor Table 2: Test of Granger Causality Between Flows education and protection to maintain the faith and and Real GDP Growth trust of these new entrants. As MFs grow in size, a Flows do not Granger Cause Real GDP Growth does not real GDP Growth Granger Cause Flows constant monitoring of risks emanating from their F stats 0.27 4.23** operations would need greater attention. Note: * p<0.1; **p<0.05; ***p<0.01. The above results are reported only for one lag. References Source: Author’s Calculations. Alexakis, C., Niarchos, N., Patra, T. and Poshakwale, A unidirectional Granger causality is established from S. (2005), “The dynamics between stock returns real GDP growth to mutual fund flows. In essence, and mutual fund flows empirical evidence from the stronger real economic growth enhances investor’s Greek market,” International Review of Financial financial capacity and confidence, enabling greater Analysis, Vol. 14, No. 5, pp. 559-569. participation in equity markets. V. Conclusion Alexakis, C., Apostolos, D. and Grose, C. (2013), “Asymmetric dynamic relations between stock prices There is an increasing preference for equity and mutual fund units in Japan. An application of investments in India, particularly through equity hidden cointegration technique”, International MFs, which are experiencing continuous growth and Review of Financial Analysis, Vol. 28, pp. 1-8. resilience. Despite a traditionally cautious approach to financial markets, the populace has shown a Al-Nassar, N. S., and Bhatti, R. H. (2019). Are common discernible inclination to embrace greater financial stocks a hedge against inflation in emerging markets? risk in their personal investment choices in recent Journal of Economics and Finance, 43, 421-455. years. MFs have notably emerged as a favoured Breiman, L. (2001). Random forests. Machine instrument in facilitating and accommodating this learning, 45(1), 5-32. shift in financial behaviour. Edwards, F. R., and Zhang, X. (1998). Mutual funds The empirical analysis highlights that increasing and stock and bond market stability. Journal of financial inclusion (proxied by demat accounts), Financial Services Research, 13(3), 257-282. fixed deposit rates, and business confidence are the Ferson, W.E. and Kim, M.S. (2012). “The factor top three influential factors shaping equity mutual structure of mutual fund flows,” International fund flows in India. An alternative analysis suggests Journal of Portfolio Analysis and Management, Vol. 1, that equity MF flows do not predict real GDP growth, No. 2, pp. 112-143. while real GDP growth does help forecast flows. This indicates that stronger economic growth enhances Fong, T. P. W., Sze, A. K. W., and Ho, E. H. C. (2018). both the capacity and confidence of investors to Determinants of equity mutual fund flows–Evidence allocate more funds toward equity markets. from the fund flow dynamics between Hong Kong and global markets. Journal of International Financial In an evolving scenario, keeping a close eye Markets, Institutions and Money, 57, 231-247. on the drivers of equity MFs may be necessary, as they have implications for household savings and Gupta, M., Kumar, S., Seet, S., and Borad, A. (2022). the changing dynamics of domestic capital markets. Market Returns and Flows to Debt Mutual Funds. RBI Increasing retail participation, both directly and Bulletin October 2022, Reserve Bank of India. RBI Bulletin August 2025 93ARTICLE Equity Mutual Funds: Transforming India’s Savings Landscape Jank, S. (2012). Mutual fund flows, expected returns, Park, J.Y., Mullineaux, D.J. and Chew, I.-T. (1990), and the real economy. Journal of Banking and “Are REITs inflation hedges?”, Journal of Real Estate Finance, 36(11), 3060-3070. Finance and Economics, Vol. 3, No. 1, pp. 91-103. Kopsch, F., Song, H. S., and Wilhelmsson, M. (2015). Remolona, E. M., Kleiman, P., and Gruenstein Bocain, Determinants of mutual fund flows. Managerial D. (1997). Market returns and mutual fund flows. Finance, 41(1), 10-25. Economic Policy Review, 3(2), 33-52. Kumar, P., Saxena, C., and Gupta, A. K. (2020). A Securities and Exchange Board of India. (2024). study on relationship between stock market returns Working paper on household savings through Indian and mutual fund flows. Journal of Commerce and securities market. Department of Economic and Accounting Research, 9(1), 1. Policy Analysis. https://www.sebi.gov.in/reportsand- Kumari, M., and Debnath, P. (2022). Determinants statistics/research/sep-2024/working-paper-on- of Mutual Fund Flows in the Indian Stock Market: household-savingsthrough-indian-securities- Insights Through the Nonlinear Autoregressive market_86459.html Distributed Lag Bounds-testing Approach with Structural Breaks. Vision. Spyrou, S. I. (2004). Are stocks a good hedge against inflation? Evidence from emerging markets. Applied Madhumathi, R., Gopal, N., and Ranganatham, M. Economics, 36(1), 41-48. (2012). Determinants of Debt and Equity Mutual Fund Flows in India. In XI Capital Markets Conference (pp. Watson, J. and Wickramanayake, J. (2012), “The 21-22). relationship between aggregate managed fund flows Mishra, P. K. (2011). Dynamics of the relationship and share market returns in Australia,” Journal of between Mutual Funds investment flow and stock International Financial Markets, Institutions and market returns in India. Vision, 15(1), 31-40. Money, Vol. 22, No. 3, pp. 451-472. 94 RBI Bulletin August 2025EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE EV Policies and Two-Wheeler registrations in India being two-wheelers in 2024-25, any initiative aimed at tackling the challenges posed EV Adoption: Evidence from by fossil fuels in the automobile sector must prioritise Indian States accelerating the adoption of two-wheeler electric vehicles (2W-EVs). India, being the third largest by Atal Singh#, Satyam Kumar, automobile market (of passenger and commercial Abhyuday Harsh and Tista Tiwari^ vehicles) and the second largest manufacturer of two-wheelers in the world, is uniquely positioned to The adoption of electric vehicles (EVs) in India is capitalise on the decarbonisation of the 2W vehicle in a nascent stage, with two-wheelers (2Ws) playing segment (Rajya Sabha, 2023). Although, the share of a critical role in the transition to sustainable mobility. 2W-EVs in total EVs (2W+3W+4W) has been rapidly While supportive policies have accelerated EV adoption, climbing upwards, it is yet to catch up with the same regional disparities persist. This paper examines the share as 2Ws in overall sales (Chart 1). Estimates impact of state-level EV promotion policies on 2W-EV suggest that with supportive policies, 80 per cent of adoption using a panel data of 23 Indian states. The 2Ws can become electric by 2030-31 (JMK Research & empirical findings suggest that state-level supportive Analysis, 2022). policies boost adoption rates. Further, robust charging A host of factors have contributed to enable EVs infrastructure, when combined with even moderate fiscal to enter mass market globally (Chart 2). Over the past incentives can drive adoption. decade, numerous supportive policies for EVs have Introduction been initiated in global markets, driving a significant expansion of EVs. These initiatives were launched as To accelerate the adoption of electric vehicles early as the 1990s in Norway, by the United States in (EVs), governments (both centre and states) have 2008, and China in 2014 (IEA, 2021). implemented several policies and initiatives. This Supportive government policies have been central push aligns closely with India’s commitment under to the global growth of EVs, addressing barriers like the Panchamrit agenda presented at Conference of high upfront costs and limited charging infrastructure. the Parties-26 to reduce the emission intensity of From tax incentives to subsidies, such measures have gross domestic product by 45 per cent from 2005 proven effective in fostering EV adoption by making levels by 2030 and achieving net zero by 2070. The them accessible and affordable to consumers (Münzel shift to EVs is crucial, inter alia, not only for meeting et al., 2019). In India, with its significant market India’s climate goals but also for addressing domestic potential, a combination of fiscal and infrastructural challenges such as reducing oil imports, combating initiatives across states can play a critical role in air pollution, and facilitating employment growth in driving this transition, particularly in the 2W segment. a sunrise sector. With about three-fourths of vehicle These policies can provide the necessary impetus for # The author is from the Department of Statistics and Information the transition to sustainable mobility. Management (DSIM). ^ The authors are from the Department of Economic and Policy Research. Globally, India, China, and the Association of The authors are grateful for the suggestions and encouragement received from Dr. Anirban Sanyal, Assistant Adviser, DSIM. The views expressed in Southeast Asian Nations (ASEAN) countries represent this article are those of the authors and do not represent the views of the Reserve Bank of India. the largest markets for two and three-wheelers. RBI Bulletin August 2025 95ARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States Chart 1: Vehicle Sales in India a. Total b. EVs (Registration in millions, left scale; Per cent, right scale) (Registration in millions, left scale; Per cent, right scale) 30 85 25 80 75 20 70 15 65 10 60 5 55 0 50 Notes: 1. Light Motor Vehicle (LMV) include cars, jeeps, vans, and small trucks used with the gross weight of under 7.5 tons. Here only passenger LMVs are considered. 2. Total refers to both conventional fossil fuel powered vehicles and EVs. Sources: CMIE Industry Outlook; and author’s calculations. In 2023, China accounted for 78 per cent of global accounting for about 95 per cent of global electric car 2W-EVs sales followed by India which is the second sales. Thus, sales of both 2W-EVs and electric cars are largest 2W-EV market globally. India had around five still geographically concentrated, albeit in different per cent of its 2W sales being electric in 2023. Electric regions1. In large emerging car markets like India and cars are also steadily advancing towards becoming Brazil, share of EVs remain relatively low, but several a mass-market product in an increasing number factors indicate potential for further growth (IEA, of countries. In 2023, majority of electric car sales 2024) [Chart 3]. occurred in China, Europe, and the United States, Against the backdrop of India’s significant position as the second largest 2W-EV market globally, the 2W-EV market holds immense promise, and the role of targeted governmental action comes to the fore. Consequently, this article analyses the impact of state government policies in driving the growth of the 2W-EVs in India. The rest of the article is divided into the following sections. Section II provides an overview of the landscape for EV policies. Section III provides a brief literature review. Section IV outlines the sources of data and methodology. The empirical estimation and results are discussed in Section V, followed by section VI, which concludes with the way forward. 1 Electric car sales are concentrated in China, Europe, and the US, while 2W-EVs are concentrated in China, India, and ASEAN countries. 96 RBI Bulletin August 2025 81-7102 91-8102 02-9102 12-0202 22-1202 32-2202 42-3202 52-4202 2.5 70 60 2.0 50 1.5 40 1.0 30 20 0.5 10 0.0 0 2W 3W 4W (LMV) Share 2W (RHS) 2W 3W 4W (LMV) Share 2W (RHS) 81-7102 91-8102 02-9102 12-0202 22-1202 32-2202 42-3202 52-4202 Chart 2: Forces Contributing to Growth of EVs Climate change Energy Advances in security renewables Forces Battery Rapid chemistry urbanisation Data capture and analysis Source: NITI Aayog, 2018.EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE Chart 3: Sales and Share of Electric Personal Vehicles a. Two Wheelers b. Cars (Sales in millions, left scale; Share of 2W-EVs as as a per cent (Sales in millions, left scale; Share of electric cars as a per cent of total 2Ws sold in that country, right scale) of total cars sold in that country, right scale) 12 60 10 50 8 40 6 30 4 20 2 10 0 0 China Others India Sales share in India (RHS) Sales share in China (RHS) Notes: Others in Chart a includes Europe, Latin America, North America, Vietnam, Afghanistan, Bangladesh, Brunei, Cambodia, Lao People's Democratic Republic, Myanmar, Mongolia, Nepal, Pakistan, Singapore, Sri Lanka and Chinese Taipei. Sources: IEA, 2024. II. Policy Landscape sector, installation of public charging points, etc. Apart from these supply side measures, demand Countries around the world are adopting multifaceted policies to promote EVs viz., prescribing side measures like upfront subsidy to buyers of EVs emission standards, providing industrial incentives, have also been at play simultaneously (Table 1). intensifying competition in the EV manufacturing However, inadequate financial incentives on account Table 1: Key Developments in Global EV policies Region Key Initiatives Brief overview United States Inflation Reduction Act Tax incentives, manufacturing linked credits support, and supply chain agreements to boost clean energy and EV production. European Union Green Deal Industry Plan Deployment of public charging stations, focus on net-zero technologies, raw material sourcing, recycling and domestic battery production to meet 90 per cent of EU demand by 2030 (as part of Net-Zero Industry Act). China EV Subsidy Program Trade-in subsidy scheme with a higher premium for purchase of EVs, exemption of EVs from purchase tax applicable on other segments, significant investment in strengthening charging infrastructure, and battery manufacturing leadership. Japan Green Growth Strategy Goal to phase out sale of new gasoline-only cars by 2035, purchase subsidies for electric and fuel cell cars, and boosting battery supply chains. Canada Zero-Emissions Vehicle (ZEV) Provincial ZEV mandates, federal purchase incentives, and supply chain investments for Mandate batteries and critical minerals. Australia National Electric Vehicle Strategy Government-led incentives for EV adoption, development of charging networks, and plans for local battery and EV component manufacturing. United Kingdom Zero Emission Vehicle (ZEV) All new cars and vans to be zero emission vehicles by 2035, investment in nationwide charging Mandate infrastructure, and tax rebates for company cars, Vehicle Emission Trading Scheme setting targets for zero-emission car sales Norway EV Tax Exemptions Exemptions from registration fees, tolls, and VAT on EV purchases; target to phase out internal combustion vehicles by 2025. India FAME I and FAME II; PM E-DRIVE Incentives to promote demand, creating necessary charging infrastructure for EVs and R&D support. Sources: IEA, 2025; and authors’ compilation. RBI Bulletin August 2025 97 8102 9102 0202 1202 2202 3202 16 40 14 35 12 30 10 25 8 20 6 15 4 10 2 5 0 0 World Sales share of World (RHS) Sales share in India (RHS) Sales share in China (RHS) 8102 9102 0202 1202 2202 3202ARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States Table 2: Evolution of EV Policy in India Policy Goals Incentives Alternate fuels for surface transportation (AFST) Developing indigenous technology and Central financial assistance as a subsidy to direct [2011] encouraging domestic manufacturing. end-users; Incentives for R&D and domestic manufacturing. National electric mobility mission plan (NEMMP) Achieve 6-7 million sales of electric and hybrid Tax incentives; support for charging 2020 [Launched in 2013] vehicles year on year from year 2020 onwards. infrastructure; Pilot projects; Market creation; and R&D support. Faster Adoption and Manufacturing of (Hybrid Four focus areas: Demand incentives for buyers of EVs in the form and) Electric Vehicles in India (FAME India) • Demand creation of an upfront-reduced purchase price, grants Scheme Phase I (2015) [Launched as part of • Technology platform for specific projects under pilot projects, R&D/ NEMMP] • Pilot projects technology development, and public charging • Charging infrastructure. infrastructure. FAME India Scheme Phase-II (2019) [Extension of Encourage faster adoption of EVs; Establishing Financial subsidies to buyers by offering upfront FAME India Scheme Phase-I] necessary charging infrastructure for EVs; incentives on purchase; State-level incentives in Carrying out various awareness activities. addition to central subsidies; and R&D support. Production Linked Incentive (PLI) Scheme for Enhance India’s Manufacturing Capabilities for Financial incentives to boost domestic Automobile and Auto components (2021) Advanced Automotive Products’. manufacturing of Advanced Automotive Technology products and attract investments in the automotive manufacturing value chain. Electric drive revolution in innovative vehicle Promote electric mobility, reduce the Subsidies/Demand incentives for 2 & 3W-EVs, enhancement (PM E-DRIVE) [2024] environmental impact of transportation, and e-ambulances, e-trucks and other emerging improve air quality; Expedite adoption of EVs. EVs; Installation of EV public charging stations Efficient, competitive, and resilient EV in selected cities with high EV penetration and manufacturing. highways. Sources: PIB; Bureau of Energy Efficiency (BEE); and authors’ compilation. of limited fiscal space can hinder the adoption of Karnataka, Andhra Pradesh and Kerala were the early EVs in emerging and developing countries movers in this regard (Chart 4). Most of the policies at (IEA, 2024). state-level were introduced between 2021 and 2023. In line with global policy trends, India has A state EV policy broadly has three main pillars viz., also introduced policy support for adoption of EVs demand incentives, improving charging infrastructure (Table 2). Early efforts began with fiscal incentives and boosting skill development and R&D. under Alternate Fuels for Surface Transportation III. Literature Review (AFST) in 2011. Most recently Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Subsidies and financial incentives influence scheme was introduced which came into effect from consumer behaviour, especially in sectors like EVs, October 1, 2024, and will remain in force until end- where high upfront costs can be prohibitive. Several March 20282 (PIB, 2024). The scheme seeks to reduce studies have shown that monetary incentives such transportation-related environmental impacts and as rebates, tax credits, and reduced registration fees improve air quality while also promoting an efficient enhance EV adoption by lowering the initial purchase and competitive EV manufacturing sector. cost for consumers (Jenn et al., 2018; and Sierzchula In line with policies of the centre, state et al., 2014). In markets such as Europe, targeted governments have also introduced complementary fiscal incentives have significantly reduced the price policies for EVs. Notably, southern states like gap between EVs and conventional vehicles, making 2 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2154408 EVs more accessible (Lévay et al., 2017). 98 RBI Bulletin August 2025EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE Chart 4: Timeline of EV Policy Notifications by States/UTs Note: The shaded region indicates that majority of state policies were notified between 2021 and 2023. Source: BEE Empirical evidence from the U.S. demonstrates infrastructure in accelerating the adoption of electric that incentives closer to the point of sale, like rebates, two-wheelers. Further, Srivastava et al. (2022) highlight are more effective in driving EV sales than tax credits through a game-theoretic model that a well-balanced (Narassimhan and Johnson, 2018). Wee, Coffman, mix of demand-side and supply-side measures, such and La Croix (2018) found that a $1000 increase in as differential taxes, can maximise social welfare, state-level subsidies in the U.S. results in a 5–11 per stimulate EV adoption, and help achieve long-term cent increase in EV registrations. Similarly, in Europe, sustainability goals. a study by Münzel et al. (2019) found that a €1000 Charging infrastructure has been repeatedly increase in financial incentives leads to a 5-7 per cent identified as a critical enabler of EV adoption. Li rise in EV market share, underscoring the importance et al. (2017) finds that greater availability of public of both the availability and magnitude of monetary charging stations is associated with higher EV sales, benefits in influencing market penetration. The emphasising the complementarity between charging adoption of EVs in India is still in a nascent stage (Saw availability and consumer demand. Hall and Lutsey et al., 2023), and hence the presence of appropriate (2017) show that markets with more developed incentives is crucial. In India, government policies charging networks, like Norway and the Netherlands, have been geared towards promoting EVs, as part have experienced significantly higher EV adoption of efforts to decarbonise the transport sector and rates. In the Indian context, Nigam et al. (2024) show reduce dependence on oil imports. Chakraborty et that the availability of charging stations influences al. (2022) underscores the importance of demand- EV uptake, highlighting the importance of robust side incentives such as price subsidies, preferential infrastructure in supporting the growth of the EV tax treatments, and improvements in charging market. RBI Bulletin August 2025 99ARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States The paper contributes to the growing literature Table 3: Sources of Data by examining the differential impact of state-level S. No. Data (State-wise) Source EV promotion policies on the adoption of 2W-EVs, a 1. 2- W sales (electric and Vahan Portal relatively underexplored segment in India. Further, it non-electric) uniquely integrates state-level policy variations with 2. Number of public charging BEE the role of charging infrastructure to provide insights stations into regional adoption disparities. 3. Road length Database of Basic Road Statistics of India, Ministry of Road Transport and Highways IV. Data and Methodology 4. EV policy notification dates BEE This study utilises quarterly data on state-wise registration of electric and non-electric 2W sales The ratio calculates the proportion of sales of (Q1:2021 to Q2:2024), number of public charging 2W-EVs vis-à-vis the non-electric 2W equivalent. stations (as on August 2024), state-wise road length Higher AR signifies a greater share of EV sales relative (as per Basic Road Statistics of India 2018-19), and to non-EVs, hence a deeper penetration of 2W-EVs. state EV policy notifications3 to capture multiple To visualise change in AR post EV policy-adoption by dimensions of developments in the 2W-EVs (Table 3, states, a geographical heat map depicting pre and post Annex 1 and 2). policy adoption scenarios are presented in Chart 5. To assess the uptake of 2W-EVs across the Indian The dark green regions in the post-policy heat map states, an adoption ratio (AR) is calculated, which is indicates that southern and the western regions defined as: of India have exhibited a stronger policy effect in adoption of 2W-EVs. In contrast, the lighter shaded Chart 5: EV Adoption in India (Before and After State EV Policy Introduction) a. Pre Policy b. Post Policy Adoption Ratio Adoption Ratio Notes: 1. The pre-policy adoption ratios for each state are calculated as the average adoption ratio for six quarters preceding the EV policy notification quarter. 2. The post-policy adoption ratios for each state are determined by averaging the adoption ratios for the six quarters following the EV policy announcement quarter. 3. For states where the EV policy was implemented before the study period, the post-policy adoption ratio is computed as the average of adoption ratios starting from the March 2021 quarter onwards. 4. For states where the policy has been implemented between March 2021 and September 2022, the averages were taken for six quarters or less preceding EV policy notification for calculating pre-policy adoption ratios. Sources: Vahan Portal; BEE; and authors’ calculations. 3 These notifications give details about the starting of scheme, information pertaining to demand incentive, government initiative to strengthen its charging infra, R&D and manpower training. 100 RBI Bulletin August 2025EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE region of heat map in the northern and eastern states hinderance to the long-term growth of EVs. indicate a comparatively modest growth in adoption A major bottleneck in adoption of an EV over rates. an internal combustion engine powered vehicle is In light of the above, evolution of AR is plotted lack of adequate charging infrastructure. To capture for different regions of India (North, South, East this, an EV charging index6 is constructed as shown and West)4 in Chart 6. The preferences for 2W-EVs below: in India have been driven by multiplicity of factors. For e.g., in the aftermath of Covid-19, the high demand for personal mobility encouraged the bike The state wise EV charging index provides rental companies to add more 2W-EVs in their fleet5. a comparative picture of the status of charging Southern and Western regions, early movers in infrastructure across India. Out of five leading states formulating state-level EV policies, have exhibited with robust charging infrastructure, three states viz., consistently better AR than all-India AR, while Karnataka, Goa and Maharashtra belong to the south- northern and eastern regions lag. Thus, the adoption west coast of India. Moreover, Delhi and Haryana trajectory across India is clearly non-uniform and non- from the north India feature in the top five (Chart 7). synchronous which can be attributed to both local Besides framing the relevant EV policies, several state and a few common factors that played out differently governments have worked upon strengthening their across regions. Additionally, inadequate charging charging infrastructure. States like Andhra Pradesh, infrastructure has been repeatedly highlighted as Assam, Bihar, Chhattisgarh, Gujarat, Kerala, etc. have been providing capital subsidies ranging between Chart 6: Region-wise Adoption Ratio 25-60 per cent on total cost of charging station (Per cent) 12 equipment/machinery and components. Delhi has provision to sanction 100 per cent grant on purchase 10 of charging equipment.7 8 In June 2023, the central government reduced 6 the subsidy provided to customers purchasing 2W-EVs under the ongoing FAME II policy as part of 4 its strategy to rationalise subsidies and promote a 2 more sustainable and self-reliant EV ecosystem in the long term as well as concerns over non-compliance 0 to localisation norms.8 The subsidy was capped at 15 per cent of the ex-factory price, reduced from the 6 The index is based on August 2024 data due to unavailability of time- Sources: Vahan Portal; BEE; and Authors’ calculations. series data on number of charging stations. 7 The Government of National Capital Territory of Delhi (GNCTD) vide 4 North: Haryana, Himachal Pradesh, Punjab, Uttar Pradesh; Uttarakhand; Delhi Electric Vehicles Policy, 2020, aims to provide a grant of 100% for the South: Andhra Pradesh, Karnataka, Kerala, Tamil Nadu; East: Bihar, Odisha, purchase of charging equipment up to Rs. 6000/- per charging point for the Jharkhand, West Bengal; West: Rajasthan, Gujrat, Goa, Maharashtra. first 30,000 charging points. 5 https://timesofindia.indiatimes.com/blogs/voices/rise-in-ev-rental-of-2- 8 https://indbiz.gov.in/govt-reduces-fame-ii-subsidies-for-electric-two- wheelers-in-india/ wheelers/ RBI Bulletin August 2025 101 12-raM 12-nuJ 12-peS 12-ceD 22-raM 22-nuJ 22-peS 22-ceD 32-raM 32-nuJ 32-peS 32-ceD 42-raM 42-nuJ North East West South All IndiaARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States Chart 7: EV Charging Infrastructure Index (Road length in lakh kms, vertical scale; Number of public charging stations, horizontal scale) 8 Maharashtra 7 6 5 Uttar Pradesh Assam Madhya Pradesh 4 Odisha Rajasthan West Bengal 3 Tamil Nadu Karnataka Bihar Punjab Gujarat 2 Andhra Pradesh Tripura Chhattisgarh 1 Chandigarh Jharkhand Haryana Delhi Goa 0 0 1000 2000 3000 4000 5000 6000 7000 Note: Larger the size of the bubble, higher is the number of public charging stations per kilometre of road length. Sources: Ministry of Road Transport and Highways of India; BEE; and authors’ compilation. previous limit of 40 per cent of the cost of the vehicle. quarter. In contrast, the 17 states offering additional Additionally, the subsidy rate was set at ₹10,000 subsidies experienced a smaller decline, with average per kWh of battery capacity, lower than the earlier adoption rate falling by 17 per cent Q-o-Q during incentive of ₹15,000 per kWh for manufacturers.9 the same period. This suggests that states providing This move impacted the sales in the September 2023 higher levels of support helped cushion the impact of quarter across India (Chart 8). the subsidy reduction under FAME II, to some extent. Most state governments have been offering For the empirical design, data on state-wise incentives such as subsidies along with tax and policies for 2W-EVs across 23 states of India is utilised, registration fee waivers on every new 2W-EV purchase. covering a period from Q1:2021 to Q2:2024, with a On the other hand, a few states did not offer any total sample size of 322 observations. First, an EV additional subsidies beyond tax and registration fee policy indicator variable for policy incentives for each waivers. An analysis of the 2W-EV adoption ratio in 23 state was created, which takes a value of 1 for periods states–six states that offered only tax and registration after the policy came into effect and 0 otherwise. fee waivers without any additional subsidies, and 17 The binary-level policy indicator encapsulates the states that provided a top-up subsidy along with these information on the diverse set of policy instruments, waivers—revealed notable differences in adoption including demand incentives, charging infrastructure trends. In the aftermath of the policy change in June development, R&D, and related aspects reflecting the 2023, the average adoption ratio in the six states impact of an overall EV policy in a state. To explore without additional subsidies contracted by 24 per the combined impact of policy implementation and cent quarter-on-quarter (Q-o-Q) in the September 2023 charging infrastructure, states are ranked based on 9 https://egazette.gov.in/(S(vtvytkdyvv1cxyitlmdwjjih))/ViewPDF.aspx EV charging index. A dummy variable representing 102 RBI Bulletin August 2025EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE Chart 8: All India 2W-EV Adoption Ratio (Per cent, left and right scale) 8 250 7 200 6 150 5 4 100 3 50 2 0 1 0 -50 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 All India adoption ratio Q-o-Q growth (RHS) Sources: Vahan portal; and authors’ calculations. the top seven or 12 states, based on their ranking in • measures the effect of policy indicator on the EV charging index, is also used in different model ad1option ratio, holding rr and state-specific β specifications. This variable is employed to analyse effects constant. the joint effect of policy measures and charging • measures the effect of rr on the adoption infrastructure on accelerating the adoption of EVs. ra2tio, holding policy indicator and state- β We employ a panel regression model, with specific effects constant. the adoption ratio (AR) as the dependent variable, • represents the additional effect on the explained by a binary-type policy indicator variable. ad3option ratio due to the interaction between β (1) the policy indicator and rr. it 1 it i it • captures the state-specific fixed effects on A R =• β Po mliceya.Isnudreicsa tthoer e+f fαec +t oϵf policy indicator on th1e adoption ratio. adi option ratio. α β • captures the state-specific fixed effects on Demand-driven incentives introduced by states adi option ratio. aim to lower the overall cost of EV ownership, α making 2W-EVs more affordable to potential buyers. In the next specification, a dummy variable (rr) The benefits range from moderate incentives, such is utilised to restrict the policy-event effect to the as registration fee waivers and tax exemptions, to leading states, focusing on the top seven or 12 with more aggressive incentives that include subsidies in the highest concentration of EV charging stations. addition to these waivers. The demand-supporting The regression model is formally expressed as policy incentives are categorised into two approaches: follows: moderate and aggressive. The policy indicator classified as ‘aggressive’ takes a value of 1 when it 1 it 2 it (2) the state government offers subsidies along with AR = β Policy.Indicator + β rr + 3 it i i it β (Policy.Indicator × rr) + α + ϵ RBI Bulletin August 2025 103ARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States tax/registration fee waivers, and 0 otherwise. The • captures the state-specific fixed effects on ‘moderate’ policy indicator takes a value of 1 if only adi option ratio. α tax/registration fee exemptions are provided, without V. Results and Discussion an additional subsidy, and 0 otherwise. The model is The results of the model (1 and 2) are presented in formally defined as follows: Table 4. The policy indicator variable shows a positive (3) and statistically significant effect on the adoption ARit =• β1 ⋅poli ciys _tahgeg it a +d o βp2 t⋅ipoonl icryat_imo ofdoi rt +a nα i i+n ϵdi it vidual ratio, signaling a positive relationship between policy statite i at time t. implementation and 2W-EV adoption. To further AR understand the impact of timely policy interventions • and are the coefficients associated in states with better EV charging infrastructure, w1ith aggre2ssive policy and moderate policy β β two panel regression models are employed. In indicators respectively. the first model, a dummy variable (rr) for charging • captures the state-specific fixed effects on infrastructure is used to represent the top seven states adi option ratio. with the best charging infrastructure (Model 2a). In α the second model, the analysis is extended to include In conjuncture, the next model incorporates the top 12 states (Model 2b). These two specifications a dummy variable (rr) for charging infrastructure, allow for a comparative assessment of the policy indicating whether a state ranks in the top seven or 12 impact across different levels of infrastructure based on the EV charging index. The model seeks to development. In these specifications, the interaction determine how these two categories of incentives— term between the policy indicator and the dummy moderate and aggressive—affect the adoption of variable for regions with better-developed charging 2W-EVs. The model is formally defined as follows: infrastructure shows that charging infrastructure, alongside state localised policy interventions, has a it 1 it 2 i multiplier effect on 2W-EV adoption, as evidenced by AR = β ⋅policy_agg + β ⋅rr + 3 it i 4 it (4) the higher coefficient of the interaction term in both β ⋅(policy_agg × rr ) + β ⋅policy_mod + models, although at lower significance levels. 5 it i i it β ⋅(p•o lic y_ manodd × arrre) t +h eα c +o eϵfficients associated with th1e aggr4essive policy and moderate policy As various states offer different demand β β incentives to encourage potential EV buyers, these indicators respectively. • measures the effect of rr on the adoption Table 4: Panel Regression Results ra2tio, holding other effects constant. Dependent Variable: Adoption Ratio (23 States) β Period (March 2021- June 2024) Sample Size = 322 • and represent the additional effect on Explanatory Variables Model 1 Model 2a Model 2b th3e adop5t ion ratio due to the interaction (Top 7 states) (Top 12 states) β β Policy Indicator 3.1** 1.80*** 1.53* between rr and aggressive and moderate (0.85) (0.47) (0.61) policy respectively. Policy Indicator *rr 4.06^ 2.72^ (2.24) (1.49) • is the dummy variable for the leading Notes: 1. ^, *, ** and *** indicate significance at 10, 5, 1 and 0.1 per staite i possessing a sound EV charging cent level, respectively. rr 2. Figures in parentheses are standard errors clustered at states infrastructure. level. 104 RBI Bulletin August 2025EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE The analysis reveals a clear regional disparity Table 5: Panel Regression Results in adoption rates, with southern and western states Dependent Variable: Adoption Ratio (23 States) Period (March 2021- June 2024) Sample Size = 322 showing greater adoption partly due to robust Explanatory Variables Model 3 Model 4a Model 4b infrastructure and early formulation of EV policies. To (Top 7 states) (Top 12 states) achieve the EV 30@30 (GoI, 2024) target and sustain Policy aggressive 3.25** 1.88*** 1.61* (0.98) (0.512) (0.72) growth, continued investment in infrastructure Policy moderate 2.03** 1.02*** 1.02*** and a phased policy approach are crucial. From (0.65) (0.00) (0.00) policy makers’ perspective, our results suggest that Policy aggressive *rr 4.96^ 2.84^ (2.82) (1.72) even moderate policy support with robust charging Policy moderate *rr 1.86*** 1.86*** infrastructure can drive EV adoption. (0.00) (0.00) Notes: 1. ^, *, ** and *** indicate significance at 10, 5,1 and 0.1 per References cent level, respectively. 2. Figures in parentheses are standard errors clustered at states Bureau of Energy Efficiency. Central Government level. Initiatives. https://evyatra.beeindia.gov.in/central- incentives are classified as moderate or aggressive, as govt-initiatives/ described above. The results of the respective model Chakraborty, R., and Chakravarty, S. (2023). Factors specifications (3) and (4) are presented in Table 5. affecting acceptance of electric two-wheelers in India: The empirical results indicate that direct monetary a discrete choice survey. Transport policy, 132, 27-41. subsidies, combined with tax and registration fee Climate Trends. (2023). Analysis of State Electric waivers on 2W-EV sales, significantly boost 2W-EV Vehicle Policies and their Impact. adoption. The moderate incentive strategy having lower coefficient value underscores the importance GoI. (2024). Electric Vehicles. Retrieved from https:// of stronger incentivisation strategy (Model 3). www.psa.gov.in/mission/electric-vehicles/36 The coefficient of interaction between moderate Hall, D., and Lutsey, N. (2017). Emerging best policy and charging infrastructure (rr), however, is practices for electric vehicle charging infrastructure. significant suggesting that even moderate policy with The International Council on Clean Transportation robust charging infrastructure can drive adoption of (ICCT): Washington, DC, USA, 54. 2W-EVs (Model 4 a and b). International Energy Agency (IEA). (2021). Global EV VI. Conclusion outlook. The adoption of 2W-EVs in India is critical for International Energy Agency (IEA). (2023). Global EV achieving decarbonisation goals. This study highlights outlook. the significant role of state-level policies in shaping International Energy Agency (IEA). (2024). Global EV the adoption trajectory of 2W-EVs across different outlook. regions in India. The findings underscore that International Energy Agency (IEA). (2025). Global EV policy measures, including financial incentives, tax outlook. waivers, and investments in charging infrastructure, significantly influence EV uptake, particularly when Jenn, A., Springel, K., and Gopal, A. R. (2018). designed to address the price-sensitive nature of the Effectiveness of electric vehicle incentives in the Indian market. United States. Energy policy, 119, 349-356. RBI Bulletin August 2025 105ARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States JMK Research & Analysis. (2022). Accelerating from Indian states. International Journal of Social Transport Electrification in India by 2030. Economics. Lévay, P. Z., Drossinos, Y., and Thiel, C. (2017). The NITI Aayog. (2018). Zero emission vehicles (ZEVs): effect of fiscal incentives on market penetration of Towards a policy framework. electric vehicles: A pairwise comparison of total cost PIB. (2024). PM E-DRIVE Scheme: Driving Towards a of ownership. Energy policy, 105, 524-533. Greener Future. Li, S., Tong, L., Xing, J., and Zhou, Y. (2017). The Rajya Sabha. (2023). Promotion of Electric Vehicles market for electric vehicles: indirect network effects in the Country. Department-Related Parliamentary and policy design. Journal of the Association of Standing Committee on Industry. Environmental and Resource Economists, 4(1), 89- Saw, K., and Kedia, A. (2023). Estimating the adoption 133. of electric vehicles: A case study of four Indian states. Mersky, A. C., Sprei, F., Samaras, C., and Qian, Z. S. Competition and Regulation in Network Industries, (2016). Effectiveness of incentives on electric vehicle 24(2-3), 120-135. adoption in Norway. Transportation Research Part D: Sierzchula, W., Bakker, S., Maat, K., and Van Wee, B. Transport and Environment, 46, 56-68. (2014). The influence of financial incentives and other Münzel, C., Plötz, P., Sprei, F., and Gnann, T. (2019). socio-economic factors on electric vehicle adoption. How large is the effect of financial incentives on Energy policy, 68, 183-194. electric vehicle sales? A global review and European Srivastava, A., Kumar, R. R., Chakraborty, A., Mateen, analysis. Energy Economics, 84, 104493. A., and Narayanamurthy, G. (2022). Design and Narassimhan, E., and Johnson, C. (2018). The role of selection of government policies for electric vehicles demand-side incentives and charging infrastructure adoption: A global perspective. 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Research Policy, 47(9), 1601-1610. 106 RBI Bulletin August 2025EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States ARTICLE Annex 1 Region Total Public Charging Stations Road Length (Kilometres) EV Charging Index Ranking NCT of Delhi 1941 16170 12.00 1 Karnataka 5765 358300 1.61 2 Haryana 708 50292 1.41 3 Goa 137 18697 0.73 4 Maharashtra 3728 636887 0.59 5 Tamil Nadu 1413 271137 0.52 6 Chandigarh 13 2573 0.51 7 Kerala 1212 259932 0.47 8 Uttar Pradesh 1989 442907 0.45 9 Punjab 593 147862 0.40 10 Gujarat 992 249373 0.40 11 Rajasthan 1129 313469 0.36 12 Andhra Pradesh 601 176351 0.34 13 Jharkhand 256 81245 0.32 14 West Bengal 763 283865 0.27 15 Chhattisgarh 271 105074 0.26 16 Uttarakhand 177 68727 0.26 17 Madhya Pradesh 903 365045 0.25 18 Odisha 488 305631 0.16 19 Himachal Pradesh 106 73230 0.14 20 Bihar 345 298205 0.12 21 Tripura 50 45120 0.11 22 Assam 276 399122 0.07 23 Sources: Ministry of Road Transport and Highways; BEE and Author’s calculations. RBI Bulletin August 2025 107ARTICLE EV Policies and Two-Wheeler EV Adoption: Evidence from Indian States Annex 2 Region Subsidy Tax/ Registration Fee Exemption Monetary Benefit Rating Goa P P 2 Delhi P P 2 Karnataka O P 1 Kerala O P 1 Maharashtra P P 2 Tamil Nadu O P 1 Uttar Pradesh P P 2 Andhra Pradesh O P 1 Rajasthan P P 2 Odisha P P 2 Madhya Pradesh O P 1 Gujarat P P 2 Chhattisgarh P P 2 Assam P P 2 Haryana P P 2 Himachal Pradesh O P 1 Jharkhand P P 2 Tripura P P 2 West Bengal P P 2 Punjab P P 2 Uttarakhand P P 2 Chandigarh P P 2 Bihar P P 2 Notes: 1. P refers to present and O refers to not present. 2. Rating of 1 signifies moderate approach while 2 signifies aggressive approach. Sources: BEE, Climate Trends and Author’s compilation. 108 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE Horticultural Diversification: This study undertakes the decomposition of agricultural growth over the past three decades A Pathway to Agricultural (1992-93 to 2022-23), disaggregating it into four key Resilience components: area expansion, yield (or technology) improvement, price effects, and crop diversification. by Shivam^ To ensure a comprehensive understanding, the study focuses on eight major crops - rice, wheat, The article examines the decomposition of pulses, coarse cereals, fruits and vegetables, oilseeds, agricultural growth from 1992-93 to 2022–23. The sugarcane, and tobacco - which collectively account analysis highlights that sustained improvements in for over 80 per cent of the gross cropped area and yield, higher cropping intensity, and a clear shift 75 per cent of the gross value of output (GVO).2 towards diversification—especially into horticulture— The finding disclosed that yield improvements and have been the principal drivers of agricultural growth. diversification, particularly towards horticulture, Encouragingly, small and marginal farmers have also have emerged as the primary engines of agricultural gained from these trends. Government interventions growth, while enhanced cropping intensity3 has also have made efforts to address challenges such as yield played a significant supporting role in this process. fluctuations, limited storage infrastructure, and price The results resonate strongly with existing volatility in horticulture production. literature (Birthal et al., 2008; Sharma, 2023), Introduction underscoring the strategic importance of crop diversification. This shift not only contributes to A vibrant agricultural sector remains enhanced farm incomes but also acts as a crucial indispensable in diffusing economic gains to the mechanism for risk mitigation and promoting long- bottom of the income pyramid, as 46.1 per cent of term sustainability (Quiroz and Valdés, 1995). The India’s workforce is engaged in agriculture (PLFS, increasing cultivation of high-value crops, particularly 2023-24). While the sector’s share in gross value fruits and vegetables, is proving vital in bolstering added (GVA) has shown a gradual moderation1, farm earnings, generating employment opportunities, its role in fostering inclusive growth and poverty and strengthening the resilience of rural economies alleviation has been crucial (Kakwani, 1993; Ravallion (Thapa et al., 2017; Anuja et al., 2020). and Datt, 1996; Thorbecke and Jung, 1994; Soloaga, 2006). In this context, a systematic decomposition Diversification is propelled by a confluence of of past agricultural growth trends offers valuable demand and supply-side factors. On the demand insights to guide policy priorities and strategic policy front, rising incomes, increasing urbanisation, and interventions. evolving consumer preferences are driving a dietary ^The author is from the Department of Economic Policy and Research, 2 The gross cropped area of rice, coarse cereal, pulses, fruits and Reserve Bank of India, Mumbai. The author would like to thank Kovuri vegetables, oilseeds, and sugarcane was available till 2024-25, while that of Akash Yadav, Rishabh Kumar and Ashish Khobragade for their guidance wheat and tobacco was available till 2023-24. The aggregate gross cropped and an anonymous referee for their comments. The views expressed in area was available till 2021-22. The latest data available for the gross value the article are those of the author and do not represent the views of the of output is available till 2022-23, therefore, the analysis is undertaken up Reserve Bank of India. to 2022-23. 1 The decline is not due to a reduction in agricultural GVA but rather 3 Cropping intensity denotes the degree to which cultivable land is a rapid expansion in industrial and service sector GVA (http://www. engaged in crop production over a defined agricultural year. It serves as an indiaenvironmentportal.org.in/files/file/winter_session_2023/Loksabha- indicator of the extent of utilisation of available arable land, reflecting the Contribution%20of%20Agriculture%20in%20GDP.pdf). intensity of agricultural operations within a given period. RBI Bulletin August 2025 109ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience transition away from traditional cereals towards a horticulture, followed by concluding observations in greater consumption of fruits and vegetables (Singha Section V. et al., 2014). This shift is corroborated by household II. Data Source and Methodology consumption expenditure surveys, which indicate a The study employs a growth decomposition declining demand for cereals alongside an increasing methodology, complemented by an analysis of yield appetite for fruits. On the supply side, Agriculture and price instability. The growth decomposition Census data reveals that small and marginal farmers, methodology of Minot (2003) facilitates a nuanced who constitute the majority of Indian agriculture4, understanding of agricultural growth sources by are progressively allocating a larger share of their incorporating physical factors - area, yield, and landholdings to horticulture, aligning with their cropping pattern - and market-linked variables, labour-intensive farming practices. namely, real prices and crop diversification. This Despite these encouraging trends, the study also approach enables the isolation of the contributions highlights three critical areas that warrant attention: of area expansion, yield improvements, price effects, fluctuations in yields, inadequate and uneven post- and crop diversification to overall agricultural harvest storage infrastructure, and heightened price growth. While this methodology provides a robust framework, it is important to acknowledge its volatility. These factors contribute to instability in drawbacks, including the limited ability to capture farmers’ incomes and often act as deterrents for interaction effects between components and the smallholders from fully embracing high-value crops. absence of statistical inference due to its accounting- In this context, this study examines four based structure (Sharma, 2023). Furthermore, the important aspects: assumption of a uniform cost structure across crops, (i) What are the primary sources of agricultural as highlighted by Minot (2003), may not always hold, growth in India over the past three decades potentially introducing aggregation bias. (1992-93 to 2022-23)? In addition to the growth decomposition, the study assesses yield and price instability, given that (ii) What is the contribution of different crops to instability is an inherent characteristic of agriculture, the overall growth of agriculture? largely attributable to its susceptibility to weather- (iii) What are the implications of such growth on related shocks. Analysing agricultural instability small farmers? is crucial as it has significant implications for both (iv) What are the challenges and policy supply and demand dynamics. On the supply side, considerations arising from this growth increased uncertainty can deter farmers from driven by diversification? adopting new technologies or undertaking necessary investments. On the demand side, price volatility can The subsequent sections of this article are disrupt consumption patterns and necessitate policy structured as follows: Section II outlines the data and interventions focused on food security and market methodology, while empirical findings are presented stabilisation (Anjum & Madhulika, 2018). Instability is in Section III. Section IV highlights challenges in commonly quantified using methods like the Cuddy- 4 The average size of operational holdings has decreased from 2.28 Della Valle Index (CDVI), Coefficient of Variation (CV), hectares in 1970–71 to 1.08 hectares in 2015–16, indicating the increasing prominence of smallholder farming (PIB, 2020). and standard deviation of first differences, which 110 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE generate similar results (Huchet-Bourdon, 2011). This (II) study employs the CDVI due to its ability to account By taking the derivative of both sides of equation for underlying linear trends often observed in prices (II), we get (Huchet-Bourdon, 2011) and yield (Hazell, 1982). II.1 Data sources The analysis uses annual data for area, production, yield, and Index of Terms of Trade (III) (ToT) between the agricultural and non-agricultural sectors (sourced from the Ministry of Agriculture and The equation (III) is divided by dR and then Farmer’s Welfare) and value of output (obtained from multiplied by the growth rate of revenue (g ) to get R National Account Statistics, Ministry of Statistics the relative contribution to growth. and Programme Implementation). To assess price dynamics, monthly price data are sourced from CMIE5 for the period January 2002 to January 2025. II.2 Methodology on the decomposition of sources of growth This study employs the decomposition method pioneered by Minot (2003) and Joshi et al., (2006) (IV) that breaks down the growth into area, prices, yield (or technology) and diversification. The real price The right-hand side of equation (IV) tells the is estimated by dividing the GVO by the quantity source of growth. The first, second, third and fourth produced. Then, the prices were developed in real term on the right-hand side represents the growth in terms (2011-12 prices) using the Wholesale Price the GVO due to the change in total cropped area (area Index (WPI) released by the Ministry of Commerce effect), changes in yield (technology /yield effect), and Industry. changes in real prices (price effect) and change Let A denote the area, Y is yield or the production in land use (diversification effect) respectively. A i i per unit area, and P is the (real) price per unit of positive sign for the fourth term suggests a positive i production under crop i. The gross revenue, R, from association between diversification and GVO, n crops can be expressed as: potentially reflecting a transition to more valuable crops. (I) The relative contributions of these growth drivers Let a be the share of crop in the total cropped i warrant careful consideration in the formulation area, i.e., , the equation (I) can be rewritten i of agricultural development policies. Agricultural as: i i i i a=A/ ∑A growth driven by an expansion in the net sown area 5 CMIE sources its data from the Agriculture Marketing Information Network (AGMARKNET) and National Commodity & Derivatives Exchange Limited (NCDEX). The data is sourced for a daily frequency for marketwise 6 The equation has ignored the interactive term. The interactive terms and variety-wise prices. The all-India estimates of overall prices across measure the change in output due to change in 2 or more inputs. The varieties and markets are computed as a simple average for the reference interactive terms are generally small and, therefore, ignored. However, the period by CMIE. cumulative effect of the interactive term may be significant. RBI Bulletin August 2025 111ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience may not be sustainable in the long term, given the (V) limited scope for further increases in cultivable land. Here, Y is the dependent variable specifying i In contrast, enhancing cropping intensity may offer yield (kg/ha) or prices (₹/kg). The intercept term a viable alternative, as it enables multiple uses of is denoted by , while the slope term is denoted the same land parcel within a year. Growth arising by β,and t is the time trend along with μ is the i α i from rising prices could be attributed to changes in error term. pricing mechanisms or reductions in transportation CDVI incorporates the adjusted R2 of the equation costs; however, such price-induced growth is unlikely (V) as shown below. to be sustainable. Therefore, achieving long-term, sustainable agricultural growth necessitates a strategic (VI) focus on improving crop yields and diversifying production towards high-value crops (Birthal et al., 2008). Here, CV represents the coefficient of variation t around the trend. In contrast, CV represents the The novelty of this study is to employ relative coefficient of variation around the mean, and contribution rather than absolute contribution. This is the adjusted coefficient of determination from approach has been adopted primarily for its ability a time-trend regression. σ measures the standard to capture the proportional impact of individual deviation and x measures the mean. components on overall growth. For instance, in 1995-96, the aggregate GVO declined compared to III. Results and Discussion the previous year (i.e., <0). During this period, III.1 Decoding Agriculture Growth Story the contribution of diversification (i.e., the fourth dR Table 1 dissects the drivers of India’s agricultural term) was positive. Had the absolute contribution growth, revealing the contribution of yield, been considered, the contribution of diversification diversification (both linked to government policies), in that year would have appeared negative. Under area (evaluated by cropping intensity) and prices the framework of relative contribution, however, the (gauged by the Index of Terms of Trade (ToT) between impact of diversification is positive, as the negative the agricultural and non-agricultural sectors). As sign of is offset by the negative growth in GVO farmers respond to relative prices rather than the (i.e., <0). dR price paid or received, the ToT was incorporated in R II.3 gInstability Index MSP in 1980 (Dev and Rao, 2015). A ToT above 100 The CDVI Index is employed to assess the indicates favourable conditions, whereas a value instability of time series data. It offers an advantage below 100 suggests an adverse environment for over the CV as it accounts for the underlying trend farmers. With mounting pressure on agricultural in the data. The CDVI achieves this by incorporating land from industrialisation and urbanisation, the adjusted R2 from a semi-log linear trend model, expanding the net sown area faces inherent limits. thereby providing a more robust measure of variability Consequently, increased cropping intensity emerges in the presence of a deterministic trend (Cuddy and as the key to maximising land utilisation and is used Della Valle, 1978). to measure area contribution. 112 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE Table 1: Contribution of Various Sources to Crop Sector Growth Period Area Price Yield Diversification Interaction 1992-93 to 2001-02 0.01 -0.79 1.72 0.76 0.26 2002-03 to 2011-12 0.83 -0.09 1.68 1.13 0.37 2012-13 to 2022-23 0.76 0.49 1.63 0.21 0.17 1992-93 to 2022-23 0.54 -0.11 1.67 0.68 0.26 Source: Author’s calculation. The initial decade (1992-93 to 2001-02) saw yield growth of 3.92 per cent. This period witnessed a rise improvements (1.72 per cent) and diversification in cropping intensity from 131.8 per cent (2002-03) (0.76 per cent) fuel the majority of the growth (1.96 to 138.9 per cent (2011-12) (chart 1.b).7 ToT began per cent). Despite a slight dip in net sown area (from to show signs of improvement during this period 142.6 to 140.7 million hectares over the period), but continued to favour the non-agriculture sector cropping intensity remained range-bound (130.1 per (Chart 1.a). This partial recovery in ToT may account cent to 134.3 per cent over the period) (Chart 1.b). for the relatively improved, though still negative, An unfavourable ToT likely contributed to negative contribution of prices to agricultural growth. price impacts (Chart 1.a). Notably, the “Golden In the third period, all sources- area (0.76 per Revolution” spurred significant gains in horticulture cent), prices (0.49 per cent), yield (1.63 per cent), and and apiculture, bolstering overall agricultural yield. diversification (0.21 per cent)- contributed positively In the second period, yield (1.68 per cent), to the overall growth of 3.25 per cent. Cropping diversification (1.13 per cent), and area expansion intensity saw a substantial jump from 139.15 per cent (0.83 per cent) were the major contributors to the in 2012-13 to 155.4 per cent in 2021-22. 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(cid:68)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:73)(cid:68)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)(cid:69)(cid:72)(cid:87)(cid:90)(cid:72)(cid:72)(cid:81)(cid:3)(cid:87)(cid:90)(cid:82)(cid:3)(cid:86)(cid:72)(cid:85)(cid:76)(cid:72)(cid:86)(cid:12)(cid:17) (cid:3) 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(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17) (cid:54)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:29)(cid:3)(cid:36)(cid:74)(cid:85)(cid:76)(cid:70)(cid:88)(cid:79)(cid:87)(cid:88)(cid:85)(cid:68)(cid:79)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:76)(cid:86)(cid:87)(cid:76)(cid:70)(cid:86)(cid:3)(cid:68)(cid:87)(cid:3)(cid:68)(cid:3)(cid:74)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:15)(cid:3)(cid:89)(cid:68)(cid:85)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:86)(cid:30)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:88)(cid:87)(cid:75)(cid:82)(cid:85)(cid:183)(cid:86)(cid:3)(cid:70)(cid:68)(cid:79)(cid:70)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17) 7 The gross cropped area expanded significantly, from 173.9 million hectares in 2002–03 to 195.6 million hectares in 2011–12, whereas the net sown area increased modestly—from 132 million hectares to 140.8 million hectares over the same period. RBI Bulletin August 2025 113 (cid:22)(cid:28)(cid:16)(cid:21)(cid:28)(cid:28)(cid:20) (cid:23)(cid:28)(cid:16)(cid:22)(cid:28)(cid:28)(cid:20) (cid:24)(cid:28)(cid:16)(cid:23)(cid:28)(cid:28)(cid:20) (cid:25)(cid:28)(cid:16)(cid:24)(cid:28)(cid:28)(cid:20) (cid:26)(cid:28)(cid:16)(cid:25)(cid:28)(cid:28)(cid:20) (cid:27)(cid:28)(cid:16)(cid:26)(cid:28)(cid:28)(cid:20) (cid:28)(cid:28)(cid:16)(cid:27)(cid:28)(cid:28)(cid:20) (cid:19)(cid:19)(cid:16)(cid:28)(cid:28)(cid:28)(cid:20) (cid:20)(cid:19)(cid:16)(cid:19)(cid:19)(cid:19)(cid:21) (cid:21)(cid:19)(cid:16)(cid:20)(cid:19)(cid:19)(cid:21) (cid:22)(cid:19)(cid:16)(cid:21)(cid:19)(cid:19)(cid:21) (cid:23)(cid:19)(cid:16)(cid:22)(cid:19)(cid:19)(cid:21) (cid:24)(cid:19)(cid:16)(cid:23)(cid:19)(cid:19)(cid:21) (cid:25)(cid:19)(cid:16)(cid:24)(cid:19)(cid:19)(cid:21) (cid:26)(cid:19)(cid:16)(cid:25)(cid:19)(cid:19)(cid:21) (cid:27)(cid:19)(cid:16)(cid:26)(cid:19)(cid:19)(cid:21) (cid:28)(cid:19)(cid:16)(cid:27)(cid:19)(cid:19)(cid:21) (cid:19)(cid:20)(cid:16)(cid:28)(cid:19)(cid:19)(cid:21) (cid:20)(cid:20)(cid:16)(cid:19)(cid:20)(cid:19)(cid:21) (cid:21)(cid:20)(cid:16)(cid:20)(cid:20)(cid:19)(cid:21) (cid:22)(cid:20)(cid:16)(cid:21)(cid:20)(cid:19)(cid:21) (cid:23)(cid:20)(cid:16)(cid:22)(cid:20)(cid:19)(cid:21) (cid:24)(cid:20)(cid:16)(cid:23)(cid:20)(cid:19)(cid:21) (cid:25)(cid:20)(cid:16)(cid:24)(cid:20)(cid:19)(cid:21) (cid:26)(cid:20)(cid:16)(cid:25)(cid:20)(cid:19)(cid:21) (cid:27)(cid:20)(cid:16)(cid:26)(cid:20)(cid:19)(cid:21) (cid:28)(cid:20)(cid:16)(cid:27)(cid:20)(cid:19)(cid:21) (cid:19)(cid:21)(cid:16)(cid:28)(cid:20)(cid:19)(cid:21) (cid:20)(cid:21)(cid:16)(cid:19)(cid:21)(cid:19)(cid:21) (cid:21)(cid:21)(cid:16)(cid:20)(cid:21)(cid:19)(cid:21) (cid:12)(cid:51)(cid:11)(cid:22)(cid:21)(cid:16)(cid:21)(cid:21)(cid:19)(cid:21) (cid:20)(cid:25)(cid:19) (cid:20)(cid:24)(cid:24) (cid:20)(cid:24)(cid:19) (cid:20)(cid:23)(cid:24) (cid:20)(cid:23)(cid:19) (cid:20)(cid:22)(cid:24) (cid:20)(cid:22)(cid:19) (cid:20)(cid:21)(cid:24) (cid:22)(cid:28)(cid:16)(cid:21)(cid:28)(cid:28)(cid:20) (cid:23)(cid:28)(cid:16)(cid:22)(cid:28)(cid:28)(cid:20) (cid:24)(cid:28)(cid:16)(cid:23)(cid:28)(cid:28)(cid:20) (cid:25)(cid:28)(cid:16)(cid:24)(cid:28)(cid:28)(cid:20) (cid:26)(cid:28)(cid:16)(cid:25)(cid:28)(cid:28)(cid:20) (cid:27)(cid:28)(cid:16)(cid:26)(cid:28)(cid:28)(cid:20) (cid:28)(cid:28)(cid:16)(cid:27)(cid:28)(cid:28)(cid:20) (cid:19)(cid:19)(cid:16)(cid:28)(cid:28)(cid:28)(cid:20) (cid:20)(cid:19)(cid:16)(cid:19)(cid:19)(cid:19)(cid:21) (cid:21)(cid:19)(cid:16)(cid:20)(cid:19)(cid:19)(cid:21) (cid:22)(cid:19)(cid:16)(cid:21)(cid:19)(cid:19)(cid:21) (cid:23)(cid:19)(cid:16)(cid:22)(cid:19)(cid:19)(cid:21) (cid:24)(cid:19)(cid:16)(cid:23)(cid:19)(cid:19)(cid:21) (cid:25)(cid:19)(cid:16)(cid:24)(cid:19)(cid:19)(cid:21) (cid:26)(cid:19)(cid:16)(cid:25)(cid:19)(cid:19)(cid:21) (cid:27)(cid:19)(cid:16)(cid:26)(cid:19)(cid:19)(cid:21) (cid:28)(cid:19)(cid:16)(cid:27)(cid:19)(cid:19)(cid:21) (cid:19)(cid:20)(cid:16)(cid:28)(cid:19)(cid:19)(cid:21) (cid:20)(cid:20)(cid:16)(cid:19)(cid:20)(cid:19)(cid:21) (cid:21)(cid:20)(cid:16)(cid:20)(cid:20)(cid:19)(cid:21) (cid:22)(cid:20)(cid:16)(cid:21)(cid:20)(cid:19)(cid:21) (cid:23)(cid:20)(cid:16)(cid:22)(cid:20)(cid:19)(cid:21) (cid:24)(cid:20)(cid:16)(cid:23)(cid:20)(cid:19)(cid:21) (cid:25)(cid:20)(cid:16)(cid:24)(cid:20)(cid:19)(cid:21) (cid:26)(cid:20)(cid:16)(cid:25)(cid:20)(cid:19)(cid:21) (cid:27)(cid:20)(cid:16)(cid:26)(cid:20)(cid:19)(cid:21) (cid:28)(cid:20)(cid:16)(cid:27)(cid:20)(cid:19)(cid:21) (cid:19)(cid:21)(cid:16)(cid:28)(cid:20)(cid:19)(cid:21) (cid:20)(cid:21)(cid:16)(cid:19)(cid:21)(cid:19)(cid:21) (cid:21)(cid:21)(cid:16)(cid:20)(cid:21)(cid:19)(cid:21)ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience period, ToT turned favourable, which may explain the A similar analysis was attempted to identify positive contribution of prices to agricultural growth. the sources of agricultural growth at the state level. However, due to the unavailability of Wholesale Price Over the period under consideration (1992- Index (WPI) data at the state level for the period 93 to 2022-23), the primary drivers of agricultural under consideration, the study could not be pursued growth were yield improvements (1.67 per cent) further. This study primarily examines diversification and diversification (0.68 per cent), followed by area into horticulture, rather than focusing on yields, as expansion (0.54 per cent). Yield gains likely stemmed the contribution of yield is well established (Sharma, from economic reforms, high-yielding seeds, irrigation 2023; Kumar, 2022). focus, mechanisation, and fertiliser subsidies (Joshi, III.2 Horticulture: The Bright Spot in Agricultural Gulati and Birthal, 2007). The analysis also indicates Growth a rise in per-hectare production across all selected While horticulture encompasses a diverse range crops over the three-decade period. Diversification of crops such as fruits and vegetables, plantation appears to be driven by multiple factors, including crops, flowers, aromatic and medicinal plants, as well changes in dietary preferences among higher-income as spices and condiments, due to data limitations, the groups, policy initiatives such as the establishment study focuses on fruits and vegetables (F&V). Table 2 of a dedicated Ministry of Food Processing Industries, highlights their consistently high growth rates across and a shift in consumption patterns—from basic all three decades under review, underscoring their staple to high-value agricultural crop even in lower crucial role in driving agricultural performance. In income brackets (Joshi, Gulati and Birthal, 2007). The 2022-23, F&V occupied a modest 5.77 per cent of rise in cropping intensity is likely linked to expanding the gross cropped area but impressively contributed irrigation, reducing reliance on rainfall. 28.19 per cent to the GVO. Table 2: Crop-Wise Contributions to Agriculture Crop Share in GCA Share in GVO Annual growth in value of output Relative contribution to output growth (per cent) (per cent) 2021-22 2022-23 1992-93 to 2002-03 to 2012-13 to 1992-93 to 2002-03 to 2012-13 to 2001-02 2011-12 2022-23 2001-02 2011-12 2022-23 Rice 22.77 14.28 2.25 1.76 2.38 0.51 0.28 0.40 Wheat 15.88 8.90 2.93 2.83 1.48 0.41 0.36 0.16 Coarse Cereals 10.96 4.01 3.59 3.03 2.73 0.19 0.12 0.08 Pulses 13.64 5.17 2.27 3.11 4.84 0.13 0.16 0.35 Oilseeds 14.65 9.22 1.45 5.66 2.94 0.18 0.55 0.22 Sugarcane 2.96 5.03 5.46 1.11 0.53 0.43 0.05 0.13 F&V 5.77 28.19 5.86 4.33 3.84 1.45 1.33 1.30 Tobacco 0.18 0.32 -0.76 3.82 -2.32 -0.01 0.02 -0.02 Other crops 13.19 24.88 - - - - - - All crops 100 100 3.31 2.96 2.41 3.29 2.88 2.61 Notes: 1. All crops in the annual growth in the value of output consider growth of all the crops irrespective of those eight crops considered while all crops in the weighted contribution of growth shown only in eight crops considered. 2. The annual growth rate is estimated by taking the average of the annual growth rate in the period considered. 3. The relative contribution of output growth is measured by taking the aggregate value of GVO of the crops considered. Then, the average value of the change in GVO of each crop is divided by the aggregate value of GVO. Sources: Agriculture Statistics at a Glance, 2023; and Author’s calculation. 114 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE In Table 2, the annual growth in the value of F&V, agricultural growth would have been noticeably output is estimated in two stages. In the first stage, slower. the year-on-year (y-o-y) growth rate is calculated for Underlying the strong performance of F&V is a each crop. In the second stage, the average growth gradual but distinct shift in Indian dietary patterns rate for each crop is computed for the respective (Table 3). Data reveals a rising share of fruits in total periods, such as 1992-93 to 2001-02. Based on this food expenditure in both rural and urban areas- approach, fruits and vegetables exhibit the highest from 2 per cent in 2004-05 to 3.9 per cent in 2023-24. growth rate in all three periods under consideration. Vegetable consumption has remained largely stable All other crops also show positive contributions to in rural areas but has seen a slight uptick in urban growth, except for tobacco. centres. Conversely, the proportion of spending on cereals and pulses has been on a downward trend, The relative contribution of output growth is signalling a broader diversification towards higher- estimated in three stages in Table 2. In the first stage, value food items. the aggregate GVO is computed. In the second stage, the change in the GVO of each crop is expressed as III.3 Cropping Patterns and Horticultural a proportion of the aggregate GVO calculated in the Diversification across Farm Sizes first step. In the final stage, the average contribution An analysis of the cropping patterns of farmers8, of each crop to output growth is determined. From especially the land share dedicated to horticulture, 1992-93 to 2022-23, the robust expansion of F&V is essential to assess whether small farmers are output has been a significant tailwind for the well-positioned to benefit from horticulture-led agricultural sector, offsetting potential slowdowns growth. As Chand (2017) highlighted, shifting one elsewhere. In the initial period (1992-93 to 2001-02), hectare of land from staple crops to high-value F&V contributed a substantial 1.45 per cent to the crops could enhance gross returns by ₹1,01,608. overall 3.29 per cent growth. This strong contribution Encouragingly, small farmers already allocate a continued in the subsequent periods, accounting for relatively larger portion of their land to horticulture 1.33 per cent of the 2.88 per cent growth (2002-03 to compared to their larger counterparts (Table 4). In 2011-12) and 1.30 per cent of the 2.61 per cent growth 2015-16, small farmers dedicated 6.08 per cent of (2012-13 to 2022-23). Without the contribution of their gross cropped area to these crops, versus 5.04 Table 3: Monthly Per Capita Consumption Expenditure Item Group Break-up of Monthly Per Capita Consumption Expenditure (per cent) 2004-05 2009-10 2011-12 2022-23 2023-24 Rural Urban Rural Urban Rural Urban Rural Urban Rural Urban Cereals and cereals substitutes 18 10 13.8 8.2 10.8 6.7 4.9 3.6 5 3.8 Pulses and their Products 3 2 3.3 2.5 2.9 2 2 1.4 2 1.4 Vegetables 6 4 8.3 5.7 6.6 4.6 5.4 3.8 6 4.1 Fruits 2 2 2.4 3.2 2.8 3.4 3.7 3.8 3.9 3.9 Source: Household Consumption Expenditure Survey, Ministry of Statistics and Programme Implementation. 8 Small farmers have landholding between 1-2 hectares while medium farmers have landholding between 4 -10 hectares. Large farmers have landholding more than 10 hectares. RBI Bulletin August 2025 115ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience Table 4: Cropping Pattern on Small versus Large Farms (Per cent of Gross Cropped Area) Farm Size Cereals Pulses Oilseeds Sugarcane Cotton Fruits Vegetables S&C9 Others Total 1995-96 Small 64.42 8.9 10.07 2.6 3.64 1.59 2.53 1.24 7.55 100 Medium 58.12 10.47 13.27 2.45 6.07 1.28 1.58 1.21 7.14 100 Large 50.72 12.72 15.41 1.53 6.3 1.02 0.9 1.21 11.07 100 All 57.77 10.71 12.84 2.16 5.22 1.3 1.69 1.22 8.77 100 2015-16 Small 62.28 8.90 11.19 2.68 5.50 1.76 3.03 1.29 3.37 100 Medium 52.64 11.92 15.57 2.69 7.68 1.69 1.97 1.66 4.18 100 Large 49.16 12.90 14.68 1.79 6.00 1.42 1.71 1.91 10.43 100 All 56.31 10.74 13.20 2.43 6.16 1.65 2.41 1.55 5.56 100 Sources: Agriculture Census, various issues. per cent for large farmers and 5.32 per cent for footprint. This increasing allocation underscores medium farmers. their strong capacity and willingness to diversify into these higher-value crops. The increasing share of horticulture in the total cropped area across all farm sizes indicates Tables 4 and 5 suggest that small farmers have a broader diversification trend. The sustained increasingly diversified into horticulture, particularly vegetables, suggesting they may have benefited from growth in cultivating fruits, vegetables, and spices this shift. However, despite these positive trends, & condiments reflects both the rising economic several challenges persist, which are explored in the importance of smallholdings and growing consumer following section. demand. A closer look reveals that small farmers lean Table 5: Distribution of Area under Horticulture towards vegetable cultivation. These crops offer across Farm Categories (Per cent) quicker returns, require less capital, and are more Gross Fruits Vegetables S&C Cropped Area labour-intensive, aligning well with the resources 1995-96 of smallholders. In contrast, larger farmers tend Small 38.6 47.2 57.6 39.1 to favour fruits and certain spices, which typically Medium 23.9 23.4 22.4 23.7 Large 37.5 29.4 20.0 37.2 demand higher upfront investment and have longer All 100.0 100.0 100.0 100.0 maturity periods. For example, mango trees take 3-5 2000-01 years to bear fruit, while onions can be harvested in Small 41.1 47.3 56.7 39.8 about six months. Medium 24.0 24.1 18.8 23.4 Large 37.5 28.6 24.5 36.7 Table 5 reveals a compelling trend, where, in All 100.0 100.0 100.0 100.0 1995-96, small farmers already dedicated the largest 2015-16 share of their land to horticulture, closely trailed by Small 48.3 51.6 60.7 40.2 large farmers. By 2015-16, this lead widened as small Medium 23.4 23.9 19.2 24.9 Large 28.3 24.4 20.1 34.9 farmers continued to expand their horticultural All 100.0 100.0 100.0 100.0 9 S&C refers to spices and condiments, which is included in horticulture. Sources: Agriculture Census, various issues. 116 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE IV. Challenges and Policy Focus10 Table 6: Instability in the Yield of Major Fruits and While horticulture presents significant Vegetables opportunities, this study now turns its attention to Crops 1992-93 to 2002-03 to 2012-13 to 1992-93 to 2001-02 2011-12 2021-22 2021-22 three key challenges that persist: the unpredictability Apple 0.08 0.15 0.12 0.14 of yields, insufficient storage infrastructure, and Banana 0.06 0.06 0.03 0.06 the volatility of prices. The study also discussed the Lemon 0.06 0.17 0.05 0.12 government’s policy responses aimed at mitigating Mosambi 0.13 0.21 0.07 0.23 these obstacles. Orange 0.18 0.15 0.05 0.19 IV.1 Fluctuation in Yield Grapes 0.13 0.24 0.01 0.20 Guava 0.04 0.05 0.04 0.08 A significant challenge in horticulture is the Mango 0.05 0.10 0.06 0.15 inherent variability in yields (Annex Table 1). Fruit Papaya 0.12 0.05 0.04 0.10 yields, in particular, show considerable fluctuation, as Total Fruits 0.06 0.06 0.05 0.10 seen in crops like lemon, mosambi, oranges, grapes, Brinjal 0.03 0.01 0.03 0.03 litchi, mango, and sapota between 1992-93 and 2021- Cabbage 0.09 0.02 0.01 0.08 22. Notably, grape and sapota yield has declined over Cauliflower 0.12 0.02 0.02 0.07 this period, highlighting the urgency for stabilisation. Peas 0.14 0.04 0.03 0.13 While vegetable yield has generally trended upwards Tomato 0.05 0.03 0.06 0.06 (with exceptions like peas and tapioca), the overall Onion 0.06 0.10 0.06 0.10 Potato 0.08 0.07 0.05 0.07 growth in fruit and vegetable yield is largely propelled Tapioca 0.05 0.03 0.21 0.15 by vegetables. The underlying causes of this yield Total 0.04 0.02 0.02 0.03 volatility warrant deeper investigation, which is Vegetables beyond the scope of this study. Sources: Department of Agriculture and Farmers Welfare, Ministry of Agriculture & Farmers Welfare; and Author’s calculation. Table 6 highlights the instability in major fruit and vegetable yields as evidenced by CDVI. For To address yield fluctuations in horticulture, the vegetables, instability decreased between 2002-03 government has launched the Mission for Integrated and 2011-12 (except for onions). Fruit yield instability, Development of Horticulture (MIDH). This umbrella however, increased during this period (except for scheme encompasses key programmes, including the banana, oranges and papaya). The subsequent decade National Horticulture Mission and the Horticulture (2012-13 to 2021-22) saw reduced instability for fruits, Mission for North East and Himalayan States, which while vegetables showed a mixed bag - increased focus on providing high-quality planting material11 instability for brinjal, tomato, and tapioca, but and tissue culture12 units, expanding cultivation areas, decreased instability for cabbage, peas, onion, and and promoting advanced horticulture technology.13 potato. Additionally, the Horticulture Cluster Development 10 In this subsection, the study focuses on individual crops. As per the first 11 Quality Planting Material may be defined as ‘the production of uniform, advance estimates 2024-25, banana (37.7 million MT), guava (5.4 million healthy, disease-free planting material raised through seed or vegetative MT), mango (22.7 million MT), papaya (5.4 million MT), grapes (4.1 million methods with an overall goal to raise the physiological and phytosanitary MT), apple (2.7 million MT), lemon (3.8 million MT), mosambi (3.9 million quality of the plant available to stakeholders to increase productivity’ MT), and orange (6.1 million MT) contributed to 81 per cent to total fruits (ICAR-CAFRI, 2019). production (113.2 million MT). Brinjal (13 million MT), cabbage (10.4 million MT), cauliflower (9.9 million MT), peas (6.8 million MT), tomato 12 Tissue culture (TC) is the cultivation of plant cells, tissues, or organs on (21.5 million MT), onion (28.9 million MT), potato (59.6 million MT), and specially formulated nutrient media. Under the right conditions, an entire tapioca (6.3 million MT) contributed to 70 per cent of total vegetables plant can be regenerated from a single cell (ISAAA). production (214.5 million MT). These crops are considered in this section. 13 https://www.myscheme.gov.in/schemes/midh RBI Bulletin August 2025 117ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience (HCD) program, launched in 2021, aims to enhance (cid:38)(cid:75)(cid:68)(cid:85)(cid:87)(cid:3)(cid:21)(cid:29)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:16)(cid:90)(cid:76)(cid:86)(cid:72)(cid:3)(cid:38)(cid:82)(cid:79)(cid:71)(cid:3)(cid:54)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:38)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92) global competitiveness by creating market-driven (cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:3)(cid:87)(cid:82)(cid:81)(cid:86)(cid:12) development across 55 identified clusters.14 This is complemented by a strong emphasis on research and development, evidenced by the growing number of establishments of dedicated institutes, research centres and directorates. IV.2 Lack of Post-Harvest Storage Capacity India grapples with substantial post-harvest (cid:31)(cid:27)(cid:17)(cid:21) (cid:27)(cid:17)(cid:21)(cid:16)(cid:21)(cid:22)(cid:25)(cid:17)(cid:26) (cid:21)(cid:22)(cid:25)(cid:17)(cid:26)(cid:16)(cid:26)(cid:27)(cid:20)(cid:17)(cid:26) (cid:33)(cid:26)(cid:27)(cid:20)(cid:17)(cid:26) losses, estimated at around ₹1.5 trillion annually (cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:29)(cid:3)(cid:20)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:79)(cid:71)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:47)(cid:68)(cid:71)(cid:68)(cid:78)(cid:75)(cid:3)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:76)(cid:71)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:86)(cid:68)(cid:80)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3) (Gulati et al., 2024), with fruits and vegetables bearing (cid:76)(cid:81)(cid:3)(cid:45)(cid:68)(cid:80)(cid:80)(cid:88)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:46)(cid:68)(cid:86)(cid:75)(cid:80)(cid:76)(cid:85)(cid:17) (cid:3) (cid:21)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:86)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:70)(cid:79)(cid:68)(cid:86)(cid:86)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:82)(cid:79)(cid:71)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:86)(cid:17)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3) the brunt due to inadequate cold storage (Negi and (cid:69)(cid:72)(cid:79)(cid:82)(cid:81)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:85)(cid:86)(cid:87)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:76)(cid:79)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:86)(cid:87)(cid:82)(cid:85)(cid:68)(cid:74)(cid:72)(cid:3)(cid:70)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:79)(cid:72)(cid:86)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:27)(cid:17)(cid:21)(cid:3) (cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:3)(cid:87)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:86)(cid:72)(cid:70)(cid:82)(cid:81)(cid:71)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:76)(cid:79)(cid:72)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:70)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)(cid:69)(cid:72)(cid:87)(cid:90)(cid:72)(cid:72)(cid:81)(cid:3)(cid:27)(cid:17)(cid:21)(cid:3) Anand, 2017). Effectively addressing these post-harvest (cid:87)(cid:82)(cid:3)(cid:21)(cid:22)(cid:25)(cid:17)(cid:26)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:3)(cid:87)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3)(cid:55)(cid:75)(cid:72)(cid:3)(cid:87)(cid:75)(cid:76)(cid:85)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:82)(cid:88)(cid:85)(cid:87)(cid:75)(cid:3)(cid:84)(cid:88)(cid:68)(cid:85)(cid:87)(cid:72)(cid:85)(cid:86)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3) (cid:70)(cid:68)(cid:83)(cid:68)(cid:70)(cid:76)(cid:87)(cid:92)(cid:3)(cid:69)(cid:72)(cid:87)(cid:90)(cid:72)(cid:72)(cid:81)(cid:3)(cid:21)(cid:22)(cid:25)(cid:17)(cid:26)(cid:3)(cid:87)(cid:82)(cid:3)(cid:26)(cid:27)(cid:20)(cid:17)(cid:26)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:3)(cid:87)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3) losses necessitates a dual approach encompassing (cid:26)(cid:27)(cid:20)(cid:17)(cid:26)(cid:3)(cid:80)(cid:72)(cid:87)(cid:85)(cid:76)(cid:70)(cid:3)(cid:87)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:17)(cid:3) (cid:54)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:29)(cid:3)(cid:43)(cid:68)(cid:81)(cid:71)(cid:69)(cid:82)(cid:82)(cid:78)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:76)(cid:86)(cid:87)(cid:76)(cid:70)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:71)(cid:76)(cid:68)(cid:81)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3)(cid:53)(cid:37)(cid:44)(cid:17)(cid:3) the expansion of cold chain infrastructure and the reinforcement of the food processing sector to prolong Infrastructure Fund (AIF), established in 2020, has the shelf life of agricultural commodities. already sanctioned over 48,000 storage projects, As of 2022, India’s cold storage capacity stood adding a capacity of 94 million tonnes.15 Reinforcing this thrust, the Union Budget 2025–26 announced at 38.2 million metric tonnes (MT), exhibiting an air cargo facility to support horticultural exports. significant regional concentration, with Uttar Pradesh Complementary schemes such as the Pradhan Mantri (38.9 per cent), West Bengal (15.6 per cent), Gujarat Formalisation of Micro Food Processing Enterprises (10.2 per cent), and Punjab (6.4 per cent) accounting (PMFME), and the Mega Food Park initiative aim for 71 per cent of the total. Chart 2, employing to improve processing, storage, branding, and quartile distribution, vividly illustrates these regional value addition. While broad-based in scope, these disparities. Strikingly, approximately 75 per cent interventions are expected to yield substantial of existing cold storage is dedicated to potatoes, spillover benefits for the horticulture sector. highlighting both the limited capacity for other perishables and the prominence of potatoes in Indian IV.3 Volatility in Prices16 consumption (Tiwari, 2021). Furthermore, the location Prices are the lifeline for farmers, steering their of these facilities near production hubs underscores production and investment decisions. However, price their reliance on efficient transportation networks. volatility acts as a significant disruptor, influencing The development of versatile, multi-commodity cold crop choices, input application, and technology storage faces technical hurdles in maintaining diverse adoption, while also injecting uncertainty across the temperature and humidity requirements. agricultural value chain (Sharma et al., 2024). To boost post-harvest infrastructure and improve the agricultural supply chain, the government 15 https://pib.gov.in/PressNoteDetails.aspx?NoteId=152061&ModuleId=3 &reg=3&lang=1 has launched several key initiatives. Agriculture 16 Given data availability, the analysis in this subsection spans from 2002- 03 to 2021-22, with rice and wheat included to provide a comparative 14 https://nhb.gov.in/CDPMap.aspx perspective vis-a-vis horticulture crop. 118 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE Table 7 unveils interesting trends in the price Recognising the challenges posed by price instability of major fruits and vegetables. Notably, volatility in horticulture, the Government of India fruit price volatility eased during 2012-13 to 2022- launched ‘Operation Greens’. Initially focused on 23 compared to the preceding decade. Conversely, Tomato, Onion, and Potato (TOP), this scheme, vegetable price volatility generally intensified over announced in the Union Budget 2018-19, aims to the same period, except for peas and cauliflower. shield farmers from distress sales and curtail post- harvest losses. Its scope was subsequently broadened The stability and upward trajectory of rice and in 2021-22 to encompass all fruits and vegetables wheat prices, as depicted in Chart 3, offer a compelling under the umbrella of TOTAL. contrast. Given the Food Corporation of India’s V. Conclusion (FCI) primary procurement focus on these cereals, the combination of assured buyers, lower price Over the past three decades (1992-93 to 2022- fluctuations, and rising price trends likely contributes 23), agricultural growth has been significantly to farmers’ persistent preference for these crops over propelled by yield (or technological) improvement, the more volatile fruits and vegetables. diversification, and increased cropping intensity. Notably, the shift towards horticulture has been a key Table 7: Instability in the Prices of Major Fruits growth engine, particularly benefiting small farmers. and Vegetables However, the sector still grapples with yield and price 2002-03 to 2012-13 to 2002-03 to volatility, exacerbated by insufficient cold storage. Crops 2011-12 2022-23 2022-23 Government initiatives like the NHM and HCD Rice 0.08 0.04 0.08 Cereals target yield stability, while the AIF and PMFME aim Wheat 0.06 0.05 0.06 to fortify cold chain infrastructure and supply chain Bananas 0.15 0.09 0.15 Guavas 0.16 0.05 0.1 efficiency- crucial steps forward. Mango 0.09 0.06 0.07 Going forward, establishing stronger linkages Papaya 0.11 0.05 0.08 between farmers and export markets, as well as urban Grapes 0.09 0.04 0.05 Fruits consumers, will be critical for accelerating agricultural Apple 0.13 0.10 0.14 growth and development. Additionally, intercropping Lemons 0.26 0.13 0.19 of horticultural and non-horticultural crops holds Mousambi 0.13 0.05 0.09 Oranges 0.15 0.06 0.11 promise for improving yields, enhancing soil health, Watermelon 0.09 0.04 0.07 and augmenting farmer incomes. Strengthening Brinjal 0.05 0.06 0.08 agricultural research to develop technologies that Onion 0.18 0.28 0.27 address emerging challenges—such as climate Potato 0.25 0.34 0.34 change and pest management—while also improving Tomato 0.07 0.16 0.16 Vegetables productivity, remains imperative. The growth of agro- Topioca 0.14 0.16 0.18 processing industries can unlock the potential for Cabbage 0.09 0.10 0.12 higher export growth, reduce post-harvest losses, Cauliflower 0.06 0.05 0.09 and generate employment opportunities in the rural Peas 0.11 0.09 0.09 Sources: CMIE and Author’s calculation. economy. RBI Bulletin August 2025 119ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience (cid:38)(cid:75)(cid:68)(cid:85)(cid:87)(cid:3)(cid:22)(cid:29)(cid:3)(cid:51)(cid:85)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:57)(cid:68)(cid:85)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3)(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:71)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86) (cid:23)(cid:15)(cid:19)(cid:19)(cid:19) (cid:22)(cid:15)(cid:19)(cid:19)(cid:19) (cid:21)(cid:15)(cid:19)(cid:19)(cid:19) (cid:20)(cid:15)(cid:19)(cid:19)(cid:19) (cid:19) (cid:49)(cid:82)(cid:87)(cid:72)(cid:29)(cid:3)(cid:36)(cid:86)(cid:3)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:75)(cid:72)(cid:68)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:82)(cid:81)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:80)(cid:82)(cid:86)(cid:87)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:72)(cid:71)(cid:3)(cid:70)(cid:85)(cid:82)(cid:83)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:44)(cid:81)(cid:71)(cid:76)(cid:68)(cid:15)(cid:3)(cid:76)(cid:87)(cid:183)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:68)(cid:86)(cid:3)(cid:68)(cid:3)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:85)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:80)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:73)(cid:85)(cid:88)(cid:76)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:89)(cid:72)(cid:74)(cid:72)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:17) (cid:54)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:29)(cid:3)(cid:38)(cid:48)(cid:44)(cid:40)(cid:17) References: Bellon, M. R., Kotu, B. H., Azzarri, C., and Caracciolo, F. (2020). To Diversify or Not to Diversify, that is Ali, M., and Abedullah, D. (2002). Nutritional and the Question. Pursuing Agricultural Development Economic Benefits of Enhanced Vegetable Production for Smallholder Farmers in Marginal Areas of and Consumption. Journal of Crop Production, 6(1-2), Ghana. World Development, 125, 104682. 145-176. Birthal, P. S., Hazrana, J., and Negi, D. S. (2020). Anjum, S., and Madhulika (2018). Growth and instability Diversification in Indian Agriculture Towards High analysis in Indian agriculture. International Journal Value Crops: Multilevel Determinants and Policy of Multidisciplinary Research and Development, 5(11), Implications. Land Use Policy, 91, 104427. 119-125. Birthal, P. S., Joshi, P. K., Chauhan, S., & Singh, H. Anuja, A. R., Kumar, A., Saroj, S., and Singh, K. N. (2008). Can Horticulture Revitalise Agricultural (2020). The Impact of Crop Diversification towards Growth?, Indian Journal of Agricultural High-value Crops on Economic Welfare of Agricultural Economics, 63(3). Households in Eastern India. Current Science, 118(10), Birthal, P. S., Joshi, P. K., Roy, D., and Thorat, A. (2013). 1575-1582. Diversification in Indian Agriculture toward High 120 RBI Bulletin August 2025 (cid:22)(cid:19)(cid:16)(cid:69)(cid:72)(cid:41) (cid:23)(cid:19)(cid:16)(cid:81)(cid:88)(cid:45) (cid:24)(cid:19)(cid:16)(cid:87)(cid:70)(cid:50) (cid:26)(cid:19)(cid:16)(cid:69)(cid:72)(cid:41) (cid:27)(cid:19)(cid:16)(cid:81)(cid:88)(cid:45) (cid:28)(cid:19)(cid:16)(cid:87)(cid:70)(cid:50) (cid:20)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:21)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:22)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:24)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:25)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:26)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:28)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:19)(cid:21)(cid:16)(cid:81)(cid:88)(cid:45) (cid:20)(cid:21)(cid:16)(cid:87)(cid:70)(cid:50) (cid:22)(cid:21)(cid:16)(cid:69)(cid:72)(cid:41) (cid:23)(cid:21)(cid:16)(cid:81)(cid:88)(cid:45) 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(cid:48)(cid:68)(cid:81)(cid:74)(cid:82) (cid:51)(cid:68)(cid:83)(cid:68)(cid:92)(cid:68) (cid:22)(cid:19)(cid:16)(cid:69)(cid:72)(cid:41) (cid:22)(cid:19)(cid:16)(cid:87)(cid:70)(cid:50) (cid:23)(cid:19)(cid:16)(cid:81)(cid:88)(cid:45) (cid:24)(cid:19)(cid:16)(cid:69)(cid:72)(cid:41) (cid:24)(cid:19)(cid:16)(cid:87)(cid:70)(cid:50) (cid:25)(cid:19)(cid:16)(cid:81)(cid:88)(cid:45) (cid:26)(cid:19)(cid:16)(cid:69)(cid:72)(cid:41) (cid:26)(cid:19)(cid:16)(cid:87)(cid:70)(cid:50) (cid:27)(cid:19)(cid:16)(cid:81)(cid:88)(cid:45) (cid:28)(cid:19)(cid:16)(cid:69)(cid:72)(cid:41) (cid:28)(cid:19)(cid:16)(cid:87)(cid:70)(cid:50) (cid:19)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:20)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:20)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:21)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:22)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:22)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:23)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:24)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:24)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:25)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:26)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:26)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:27)(cid:20)(cid:16)(cid:81)(cid:88)(cid:45) (cid:28)(cid:20)(cid:16)(cid:69)(cid:72)(cid:41) (cid:28)(cid:20)(cid:16)(cid:87)(cid:70)(cid:50) (cid:19)(cid:21)(cid:16)(cid:81)(cid:88)(cid:45) (cid:20)(cid:21)(cid:16)(cid:69)(cid:72)(cid:41) (cid:20)(cid:21)(cid:16)(cid:87)(cid:70)(cid:50) (cid:21)(cid:21)(cid:16)(cid:81)(cid:88)(cid:45) (cid:22)(cid:21)(cid:16)(cid:69)(cid:72)(cid:41) (cid:22)(cid:21)(cid:16)(cid:87)(cid:70)(cid:50) (cid:23)(cid:21)(cid:16)(cid:81)(cid:88)(cid:45) (cid:70)(cid:17)(cid:3)(cid:48)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:57)(cid:72)(cid:74)(cid:72)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86) (cid:523)(cid:3400)(cid:3)(cid:146)(cid:135)(cid:148)(cid:3)(cid:20)(cid:151)(cid:139)(cid:144)(cid:150)(cid:131)(cid:142)(cid:524) (cid:37)(cid:85)(cid:76)(cid:81)(cid:77)(cid:68)(cid:79) (cid:50)(cid:81)(cid:76)(cid:82)(cid:81) (cid:51)(cid:82)(cid:87)(cid:68)(cid:87)(cid:82) (cid:55)(cid:82)(cid:80)(cid:68)(cid:87)(cid:82)Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE Value Crops: The Role of Small Farmers. 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Reducing Post-Harvest Losses in Indian Industry: A Challenge. IUP Journal of Supply Chain Agriculture-A Case Study of Selected Crops (No. Management, 14(2). 20). Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India. Quiroz, J. A., & Valdés, A. (1995). Agricultural diversification and policy reform. Hazell, P. B. (1982). Instability in Indian foodgrain production (Vol. 30). International Food Policy Ravallion, M., and Datt, G. (1996). How Important Research Institute. to India’s Poor is the Sectoral Composition of Economic Growth? The World Bank Economic Review, Himanshu (2019, November 7). India’s farm crisis: 10(1), 1-25. Decades old and with deep roots. Ideas for India. https://www.ideasforindia.in/topics/agriculture/ Sharma, H. R. (2023). Patterns, sources and indias-farm-crisis-decades-old-and-with-deep-roots. determinants of agricultural growth in India. Indian html Journal of Agricultural Economics, 78(1), 26-70. RBI Bulletin August 2025 121ARTICLE Horticultural Diversification: A Pathway to Agricultural Resilience Sharma, H. R., Basantaray, A. K., & Acharya, S. (2023). Association of Agricultural Economists Conference, Characteristics and Performance of Agricultural Gold Coast, Australia. Households Diversifying to High Value Crops: Evidence Thapa, G., Kumar, A., and Joshi, P. K. (2017). Agricultural from Rural India. Indian Journal of Agricultural Diversification in Nepal: Status, Determinants, and Economics, 70(3), 591-607. its Impact on Rural Poverty (Vol. 1634). International Sharma, P., Yeasin, M., Paul, R. K., and M. E. Food Policy Research Institute. (2024). Food Price Volatility in India (No. 349209). Thorbecke, E., and Jung, H. S. (1996). A Multiplier ICAR National Institute of Agricultural Economics and Policy Research (NIAP). Decomposition Method to Analyze Poverty Alleviation. Journal of Development Economics, 48(2), Singha, K., Choudhary, R., & Vishnu, K. (2014). 279-300. 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International Journal of Agricultural Marketing, 35(3), 1-20. 122 RBI Bulletin August 2025Horticultural Diversification: A Pathway to Agricultural Resilience ARTICLE Annex: Table 1: Average Yields of Various Horticulture Crops (Metric Tonnes/Hectares) Horticulture 1992-93 to 2001-02 2002-03 to 2011-12 2012-13 to 2021-22 1992-93 to 2021-22 Total Fruits 11.5 11 14.2 12.5 Apple 5.5 7.5 7.7 7 Banana 30.1 33.6 35.6 33.7 Lemon* 8.9 8.8 10.7 9.7 Mosambi* 11.9 10.1 15.5 12.7 Oranges* 8.7 7.7 12 10.1 Grapes 22.2 19.9 21.6 21.2 Guava 11.1 11.2 15 12.9 Litchi 6.8 6.7 7 6.9 Mango 7.5 6.4 8.5 7.5 Papaya 24.3 35.8 41.5 36 Pineapple 14.6 15.3 16.5 15.6 Pomegranate - 7 11.1 10.1 Sapota 12 8.5 11.1 10 Total Vegetables 14 15.9 17.8 16.3 Brinjal* 15.6 17 17.9 17 Cabbage 20.1 22 22.7 21.9 Cauliflower 16.5 18.5 19.4 18.4 Okra 9.7 10.6 11.9 10.9 Peas 9.1 8.1 9.9 9.2 Tomato 15.6 18.4 23.8 20.2 Onion 10.6 14.8 16.9 15.2 Potato 17.3 19.4 23 20.4 Sweet Potato 8.5 9 10.9 9.4 Tapioca 24.9 32.7 30.2 29.2 Notes: 1. *: Data available from 1993-94 onwards. 2. -: Not Available. 3. Here, yield is calculated by taking the average production divided by the average area under cultivation during the period. This study has deliberately not compared the yield of a specific year as that year’s yield may be impacted by exogenous factors such as weather events, pests, and diseases, etc. 4. Yellow colour indicates the fall in yield, while green colour indicates the rise in yield. The yield in 2002-03 to 2011-12 is compared with that from 1992-93 to 2001-02, while the yield from 2012-13 to 2021-22 is compared with 2002-03 to 2011-12. The overall yield from 1992-93 to 2021- 22 is compared with 1992-93 to 2001-02. Sources: Department of Agriculture and Farmers Welfare, Ministry of Agriculture & Farmers Welfare; and Author’s calculation. RBI Bulletin August 2025 123CURRENT STATISTICS Select Economic Indicators Reserve Bank of India Money and Banking Prices and Production Government Accounts and Treasury Bills Financial Markets External Sector Payment and Settlement Systems Occasional SeriesCURRENT STATISTICS Contents No. Title Page 1 Select Economic Indicators 127 Reserve Bank of India 2 RBI – Liabilities and Assets 128 3 Liquidity Operations by RBI 129 4 Sale/ Purchase of U.S. Dollar by the RBI 130 4A Maturity Breakdown (by Residual Maturity) of Outstanding Forwards of RBI (US$ Million) 131 5 RBI's Standing Facilities 131 Money and Banking 6 Money Stock Measures 132 7 Sources of Money Stock (M) 133 3 8 Monetary Survey 134 9 Liquidity Aggregates 135 10 Reserve Bank of India Survey 136 11 Reserve Money – Components and Sources 136 12 Commercial Bank Survey 137 13 Scheduled Commercial Banks' Investments 137 14 Business in India – All Scheduled Banks and All Scheduled Commercial Banks 138 15 Deployment of Gross Bank Credit by Major Sectors 139 16 Industry-wise Deployment of Gross Bank Credit 140 17 State Co-operative Banks Maintaining Accounts with the Reserve Bank of India 141 Prices and Production 18 Consumer Price Index (Base: 2012=100) 142 19 Other Consumer Price Indices 142 20 Monthly Average Price of Gold and Silver in Mumbai 142 21 Wholesale Price Index 143 22 Index of Industrial Production (Base: 2011-12=100) 147 Government Accounts and Treasury Bills 23 Union Government Accounts at a Glance 147 24 Treasury Bills – Ownership Pattern 148 25 Auctions of Treasury Bills 148 Financial Markets 26 Daily Call Money Rates 149 27 Certificates of Deposit 150 28 Commercial Paper 150 29 Average Daily Turnover in Select Financial Markets 150 30 New Capital Issues by Non-Government Public Limited Companies 151 RBI Bulletin August 2025 125CURRENT STATISTICS No. Title Page External Sector 31 Foreign Trade 152 32 Foreign Exchange Reserves 152 33 Non-Resident Deposits 152 34 Foreign Investment Inflows 153 35 Outward Remittances under the Liberalised Remittance Scheme (LRS) for Resident Individuals 153 36 Indices of Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER) of the Indian Rupee 154 37 External Commercial Borrowings (ECBs) – Registrations 155 38 India’s Overall Balance of Payments (US $ Million) 156 39 India's Overall Balance of Payments (` Crore) 157 40 Standard Presentation of BoP in India as per BPM6 (US $ Million) 158 41 Standard Presentation of BoP in India as per BPM6 (` Crore) 159 42 India’s International Investment Position 160 Payment and Settlement Systems 43 Payment System Indicators 161 Occasional Series 44 Small Savings 163 45 Ownership Pattern of Central and State Governments Securities 164 46 Combined Receipts and Disbursements of the Central and State Governments 165 47 Financial Accommodation Availed by State Governments under various Facilities 166 48 Investments by State Governments 167 49 Market Borrowings of State Governments 168 50 (a) Flow of Financial Assets and Liabilities of Households - Instrument-wise 169 50 (b) Stocks of Financial Assets and Liabilities of Households- Select Indicators 172 Notes: .. = Not available. – = Nil/Negligible. P = Preliminary/Provisional. PR = Partially Revised. 126 RBI Bulletin August 2025CURRENT STATISTICS No. 1: Select Economic Indicators 2023-24 2024-25 Item 2024-25 Q3 Q4 Q3 Q4 1 2 3 4 5 1 Real Sector (% Change) 1.1 GVA at Basic Prices 6.4 8.0 7.3 6.5 6.8 1.1.1 Agriculture 4.6 1.5 0.9 6.6 5.4 1.1.2 Industry 4.5 12.6 9.9 3.5 4.7 1.1.3 Services 7.5 8.5 8.0 7.5 7.9 1.1a Final Consumption Expenditure 6.5 5.3 6.3 8.3 4.7 1.1b Gross Fixed Capital Formation 7. 1 9. 3 6 . 0 5 . 2 9 . 4 2024 2025 2024-25 May Jun. May Jun. 1 2 3 4 5 1.2 Index of Industrial Production 4.0 6.3 4.9 1.9 1.5 2 Money and Banking (% Change) 2.1 Scheduled Commercial Banks 2.1.1 Deposits 10.6 12.2 10.7 10.1 10.3 (10.3) (12.7) (11.1) (9.9) (10.1) 2.1.2 Credit # 12.1 16.1 13.9 9.9 10.4 (11.0) (19.8) (17.4) (9.0) (9.5) 2.1.2.1 Non-food Credit # 12.0 16.2 13.9 9.8 10.2 (11.0 ) (19.8 ) (17.4 ) (8. 8 ) (9. 3 ) 2.1.3 Investment in Govt. Securities 10.6 8.8 7.4 9.2 9.2 (9.7) (10.3) (8.6) (8.5) (8.8) 2.2 Money Stock Measures 2.2.1 Reserve Money (M0) 4.3 5.8 7.4 6.1 4.9 2.2.2 Broad Money (M3) 9. 6 12. 1 9 . 7 9 . 5 9 . 6 (9.4) (12.5) (10.1) (9.3) (9.5) 3 Ratios (%) 3.1 Cash Reserve Ratio 4.00 4.50 4.50 4.00 4.00 3.2 Statutory Liquidity Ratio 18.00 18.00 18.00 18.00 18.00 3.3 Cash-Deposit Ratio 4.3 5.0 5.1 4.5 4.4 (4.3) (4.9) (5.1) (4.5) (4.4) 3.4 Credit-Deposit Ratio 79.1 77.5 77.3 77.4 77.4 (80.8) (79.6) (79.3) (78.9) (78.9) 3.5 Incremental Credit-Deposit Ratio # 89.2 59.2 58.4 11.0 31.6 (86.1) (57.3) (56.0) (7.3) (28.7) 3.6 Investment-Deposit Ratio 29.5 29.0 28.8 28.8 28.5 (29.7) (29.3) (28.9) (28.9) (28.6) 3.7 Incremental Investment-Deposit Ratio 29.5 13.4 9.4 1.7 0.0 (28.1) (12.6) (6.4) (1.5) (-0.1) 4 Interest Rates (%) 4.1 Policy Repo Rate 6.2 5 6.5 0 6.5 0 6.0 0 5.5 0 4.2 Fixed Reverse Repo Rate 3.35 3.35 3.35 3.35 3.35 4.3 Standing Deposit Facility (SDF) Rate * 6.00 6.25 6.25 5.75 5.25 4.4 Marginal Standing Facility (MSF) Rate 6.50 6.75 6.75 6.25 5.75 4.5 Bank Rate 6.50 6.75 6.75 6.25 5.75 4.6 Base Rate 9.10/10.40 9.10/10.25 9.10/10.40 9.10/10.40 9.10/10.30 4.7 MCLR (Overnight) 8.15/8.45 8.00/8.60 8.10/8.60 8.15/8.25 7.95/8.25 4.8 Term Deposit Rate >1 Year 6.00/7.25 6.00/7.25 6.00/7.30 6.00/6.85 5.85/6.70 4.9 Savings Deposit Rate 2.70/3.00 2.70/3.00 2.70/3.00 2.70/2.75 2.50/2.75 4.10 Call Money Rate (Weighted Average) 6.35 6.56 6.67 5.80 5.29 4.11 91-Day Treasury Bill (Primary) Yield 6.52 6.85 6.80 5.62 5.41 4.12 182-Day Treasury Bill (Primary) Yield 6.52 7.01 6.92 5.63 5.54 4.13 364-Day Treasury Bill (Primary) Yield 6.47 7.04 6.96 5.63 5.57 4.14 10-Year G-Sec Par Yield (FBIL) 6.62 7.01 7.04 6.23 6.34 5 Reference Rate and Forward Premia 5.1 INR-US$ Spot Rate (Rs. Per Foreign Currency) 85.58 83.30 83.45 85.48 85.56 5.2 INR-Euro Spot Rate (Rs. Per Foreign Currency) 92.32 90.12 89.25 96.94 100.20 5.3 Forward Premia of US$ 1-month (%) 3.12 1.08 1.10 2.01 1.65 3-month (%) 2.56 1.22 1.14 1.87 1.66 6-month (%) 2.2 8 1.3 4 1.2 6 1.8 3 1.7 9 6 Inflation (%) 6.1 All India Consumer Price Index 4.6 4.8 5.1 2.8 2.1 6.2 Consumer Price Index for Industrial Workers 3.39 3.9 3.7 2.9 2.5 6.3 Wholesale Price Index 2.3 2.7 3.4 0.1 -0.1 6.3.1 Primary Articles 5.2 7.4 9.2 -1.8 -3.4 6.3.2 Fuel and Power -1.3 1.0 0.5 -4.8 -2.7 6.3.3 Manufactured Products 1. 7 1. 0 1 . 5 2 . 1 2 . 0 7 Foreign Trade (% Change) 7.1 Imports 6.2 7.3 4.6 -1.7 -3.7 7.2 Exports 0.1 13.3 2.4 -2.8 -0.1 Note : Financial Benchmark India Pvt. Ltd. (FBIL) has commenced publication of the G-Sec benchmarks with effect from March 31, 2018 as per RBI circularFMRD.DIRD. 7/14.03.025/2017-18 dated March 31, 2018. FBIL has started dissemination of reference rates w.e.f. July 10, 2018. #: Bank credit growth and related ratios for all fortnights from December 3, 2021 to November 18, 2022 are adjusted for past reporting errors by select scheduled commercial banks (SCBs). Figures in parentheses include the impact of merger of a non-bank with a bank. *: As per Press Release No. 2022-2023/41 dated April 08, 2022. RBI Bulletin August 2025 127CURRENT STATISTICS Reserve Bank of India No. 2: RBI - Liabilities and Assets * (₹ Crore) Item As on the Last Friday/ Friday 2024-25 2024 2025 Jul. Jun. 27 Jul. 04 Jul. 11 Jul. 18 Jul. 25 1 2 3 4 5 6 7 1 Issue Department 1.1 Liabilities 1.1.1 Notes in Circulation 3683836 3502874 3783575 3783770 3787633 3773600 3763742 1.1.2 Notes held in Banking Department 11 10 18 17 18 17 16 1.1/1.2 Total Liabilities (Total Notes Issued) or Assets 3683847 3502885 3783593 3783786 3787651 3773617 3763757 1.2 Assets 1.2.1 Gold 235379 176856 255940 256703 256442 257948 262726 1.2.2 Foreign Securities 3448129 3325806 3527205 3526711 3530927 3515466 3500580 1.2.3 Rupee Coin 340 223 448 372 282 202 451 1.2.4 Government of India Rupee Securities - - - - - - - 2 Banking Department 2.1 Liabilities 2.1.1 Deposits 1709285 1702094 1803255 1782659 1767751 1784027 1811847 2.1.1.1 Central Government 100 100 100 101 100 101 101 2.1.1.2 Market Stabilisation Scheme - - - - - - 2.1.1.3 State Governments 42 42 42 42 42 42 43 2.1.1.4 Scheduled Commercial Banks 943060 976073 933483 931978 930199 984796 918229 2.1.1.5 Scheduled State Co-operative Banks 7776 8282 8300 8259 8078 8037 7969 2.1.1.6 Non-Scheduled State Co-operative Banks 5963 5278 4984 5234 5049 4994 5061 2.1.1.7 Other Banks 46963 49426 47375 47518 47621 47335 47638 2.1.1.8 Others 593085 538460 715693 692957 676113 641067 720791 2.1.1.9 Financial Institution Outside India 112296 124433 93278 96570 100547 97656 112014 2.1.2 Other Liabilities 2150508 1723581 2183725 2184406 2190245 2206803 2249693 2.1/2.2 Total Liabilities or Assets 3859793 3425675 3986980 3967065 3957996 3990831 4061540 2.2 Assets 2.2.1 Notes and Coins 11 10 18 17 18 17 16 2.2.2 Balances Held Abroad 1413591 1625418 1590460 1554686 1553945 1579733 1627461 2.2.3 Loans and Advances 2.2.3.1 Central Government - - - - - - - 2.2.3.2 State Governments 26284 21239 20066 30956 20431 26294 24026 2.2.3.3 Scheduled Commercial Banks 251984 7161 1065 1282 1223 951 1906 2.2.3.4 Scheduled State Co-op.Banks - - - - - - - 2.2.3.5 Industrial Dev. Bank of India - - - - - - - 2.2.3.6 NABARD - - - - - - - 2.2.3.7 EXIM Bank - - - - - - - 2.2.3.8 Others 36426 9062 7031 6237 5901 6171 10320 2.2.3.9 Financial Institution Outside India 111768 124192 93636 96709 100592 97655 112123 2.2.4 Bills Purchased and Discounted 2.2.4.1 Internal - - - - - - - 2.2.4.2 Government Treasury Bills - - - - - - - 2.2.5 Investments 1560630 1322437 1787779 1790646 1789719 1790931 1787703 2.2.6 Other Assets 459101 316156 486926 486533 486166 489079 497986 2.2.6.1 Gold 429510 306207 466434 467825 467349 470094 478801 * Data are provisional. 128 RBI Bulletin August 2025CURRENT STATISTICS No. 3: Liquidity Operations by RBI (₹ Crore) Date Standing OMO (Outright) Net Injection (+)/ Liquidity Absorption (-) Liquidity Adjustment Facility Facilities (1+3+5+7+9-2-4-6 -8) Sale Purchase Variable Variable Reverse Rate Repo Rate MSF SDF Repo Reverse Repo Repo 1 2 3 4 5 6 7 8 9 10 Jun. 1, 2025 - - - - 922 231621 - - - -230699 Jun. 2, 2025 - - 5150 - 1109 292229 - - - -285970 Jun. 3, 2025 - - 5019 - 447 314265 -322 - - -309121 Jun. 4, 2025 - - 4271 - 622 299291 49 - - -294349 Jun. 5, 2025 - - 4138 - 580 316403 - - - -311685 Jun. 6, 2025 - - 3550 - 1977 326946 - - - -321419 Jun. 7, 2025 - - - - 58 197270 - - - -197212 Jun. 8, 2025 - - - - 25 196222 - - - -196197 Jun. 9, 2025 - - 3711 - 2123 258855 - - - -253021 Jun. 10, 2025 - - 3853 - 16 272671 -1513 - - -270315 Jun. 11, 2025 - - - - 1124 267414 1663 - - -264628 Jun. 12, 2025 - - - - 1095 285659 - - - -284564 Jun. 13, 2025 - - - - 2248 373129 - - - -370881 Jun. 14, 2025 - - - - 8 219212 - - - -219204 Jun. 15, 2025 - - - - 48 205124 - - - -205076 Jun. 16, 2025 - - - - 1289 277831 - - 10 -276532 Jun. 17, 2025 - - - - 1297 299971 - - - -298674 Jun. 18, 2025 - - - - 1389 296073 -1139 - - -295823 Jun. 19, 2025 - - - - 1323 322568 -175 - - -321420 Jun. 20, 2025 - - - - 2659 303886 -125 - - -301352 Jun. 21, 2025 - - - - 946 235683 - - - -234737 Jun. 22, 2025 - - - - 285 196522 - - - -196237 Jun. 23, 2025 - - - - 906 251686 - - - -250780 Jun. 24, 2025 - - - - 1090 267171 - - - -266081 Jun. 25, 2025 - - - - 1309 255293 -599 - - -254583 Jun. 26, 2025 - - - - 1826 279877 577 - - -277474 Jun. 27, 2025 - - - 84975 1065 223883 - - - -307793 Jun. 28, 2025 - - - - 436 155844 - - - -155408 Jun. 29, 2025 - - - - 141 153631 - - - -153490 Jun. 30, 2025 - - - - 5705 189751 237 - - -183809 RBI Bulletin August 2025 129CURRENT STATISTICS No. 4: Sale/ Purchase of U.S. Dollar by the RBI i) Operations in onshore / offshore OTC segment Item 2024 2025 2024-25 Jun. May Jun. 1 2 3 4 1 Net Purchase/ Sale of Foreign Currency (US $ Million) (1.1-1.2) -34511 -2107 1764 -3661 1.1 Purchase (+) 364200 15936 9124 1164 1.2 Sale (–) 398711 18043 7360 4825 2 ₹ equivalent at contract rate (₹ Crores) -291233 -17688 14562 -31808 3 Cumulative (over end-March) (US $ Million) -34511 -1532 104 -3557 (₹ Crore) -291233 -13016 -73 -31881 4 Outstanding Net Forward Sales (-)/ Purchase (+) at the end of month (US -84345 -15835 -65215 -60390 $ Million) ii) Operations in currency futures segment Item 2024 2025 2024-25 Jun. May Jun. 1 2 3 4 1 Net Purchase/ Sale of Foreign Currency (US $ Million) (1.1-1.2) 0 0 0 0 1.1 Purchase (+) 31415 2338 0 0 1.2 Sale (–) 31415 2338 0 0 2 Outstanding Net Currency Futures Sales (-)/ Purchase (+) at the end of 0 -1974 0 0 month (US $ Million) 130 RBI Bulletin August 2025CURRENT STATISTICS No. 4 A : Maturity Breakdown (by Residual Maturity) of Outstanding Forwards of RBI (US $ Million) Item As on June 30 , 2025 Long (+) Short (-) Net (1-2) 1 2 3 1. Upto 1 month 0 2540 -2540 2. More than 1 month and upto 3 months 0 11845 -11845 3. More than 3 months and upto 1 year 0 25905 -25905 4. More than 1 year 0 20100 -20100 Total (1+2+3+4) 0 60390 -60390 No. 5: RBI’s Standing Facilities (₹ Crore) Item As on the Last Reporting Friday 2024-25 2024 2025 Jul. 26 Feb. 21 Mar. 21 Apr. 18 May 30 Jun. 27 Jul. 25 1 2 3 4 5 6 7 8 1 MSF 9961 2021 500 9961 2003 1540 1065 1906 2 Export Credit Refinance for Scheduled Banks 2.1 Limit - - - - - - - - 2.2 Outstanding - - - - - - - - 3 Liquidity Facility for PDs 3.1 Limit 9900 9900 9900 9900 14900 14900 14900 14900 3.2 Outstanding 9517 9062 9096 9517 7999 8595 7010 10299 4 Others 4.1 Limit 76000 76000 76000 76000 76000 76000 76000 76000 4.2 Outstanding - - - - - - - - 5 Total Outstanding (1+2.2+3.2+4.2) 19478 11083 9596 19478 10002 10135 8075 12205 RBI Bulletin August 2025 131CURRENT STATISTICS Money and Banking No. 6: Money Stock Measures (₹ Crore) Item Outstanding as on March 31/last reporting Fridays of the month/ reporting Fridays 2024-25 2024 2025 Jun. 28 May 30 Jun. 13 Jun. 27 1 2 3 4 5 1 Currency with the Public (1.1 + 1.2 + 1.3 – 1.4) 3630751 3446055 3736896 3744990 3722652 1.1 Notes in Circulation 3686799 3528333 3797410 3808950 3782437 1.2 Circulation of Rupee Coin 35889 33322 36548 36548 36909 1.3 Circulation of Small Coins 743 743 743 743 743 1.4 Cash on Hand with Banks 93696 116948 98902 102371 98575 2 Deposit Money of the Public 2953329 2842003 3241663 3110721 3324072 2.1 Demand Deposits with Banks 2840023 2746237 3131530 3001877 3215375 2.2 'Other' Deposits with Reserve Bank 113307 95766 110133 108844 108697 3 M1 (1 + 2) 6584081 6288057 6978559 6855711 7046725 4 Post Office Saving Bank Deposits 212331 199223 212331 212331 212331 5 M2 (3 + 4) 6796412 6487280 7190890 7068042 7259056 6 Time Deposits with Banks 20643062 19413650 20956339 20987083 21131104 (20702508) (19503047) (21011378) (21040863) (21183731) 7 M3 (3 + 6) 27227143 25701708 27934898 27842794 28177829 (27286589) (25791104) (27989937) (27896574) (28230456) 8 Total Post Office Deposits 1443555 1351212 1443555 1443555 1443555 9 M4 (7 + 8) 28670698 27052920 29378453 29286349 29621384 (28730144) (27142316) (29433492) (29340129) (29674011) Figures in parentheses include the impact of merger of a non-bank with a bank. 132 RBI Bulletin August 2025CURRENT STATISTICS No. 7 : Sources of Money Stock (M) 3 (₹ Crore) Sources Outstanding as on March 31/last reporting Fridays of the month/reporting Fridays 2024-25 2024 2025 Jun. 28 May 30 Jun. 13 Jun. 27 1 2 3 4 5 1 Net Bank Credit to Government 8463065 7424141 8446563 8556270 8473446 1 Net Bank Credit to Government (Including Merger) (8510825) (7489485) (8493151) (8602857) (8520033) 1.1 RBI’s net credit to Government (1.1.1–1.1.2) 1508105 1026142 1479315 1602562 1513361 1.1.1 Claims on Government 1591591 1355438 1839456 1804247 1806229 1.1.1.1 Central Government 1558903 1348151 1811974 1788285 1786164 1.1.1.2 State Governments 32688 7286 27482 15962 20066 1.1.2 Government deposits with RBI 83485 329296 360141 201685 292869 1.1.2.1 Central Government 83443 329254 360099 201643 292826 1.1.2.2 State Governments 42 42 42 42 42 1.2 Other Banks’ Credit to Government 6954959 6397999 6967248 6953707 6960086 1.2 Other Banks Credit to Government (Including Merger) (7002720) (6463344) (7013836) (7000295) (7006672) 2 Bank Credit to Commercial Sector 18646762 17148762 18690046 18715304 18888886 2 Bank Credit to Commercial Sector (Including Merger) (19068129) (17648993) (19089019) (19113760) (19283371) 2.1 RBI’s credit to commercial sector 38246 10922 14393 10263 9029 2.2 Other banks’ credit to commercial sector 18608516 17137840 18675653 18705041 18879856 2.2 Other banks credit to commercial sector (Including Merger) (19029883) (17638071) (19074626) (19103496) (19274342) 2.2.1 Bank credit by commercial banks 17822605 16385798 17888404 17915507 18091714 2.2.1 Bank credit by commercial banks (Including Merger) (18243972) (16886029) (18287377) (18313963) (18486200) 2.2.2 Bank credit by co-operative banks 766659 733421 768000 770519 769075 2.2.3 Investments by commercial and co-operative banks in other securities 19252 18621 19249 19014 19067 2.2.3 Investments by commercial and co-operative banks in other securities (Including Merger) (19252) (18621) (19249) (19014) (19067) 3 Net Foreign Exchange Assets of Banking Sector (3.1 + 3.2) 6148527 5653720 6350876 6449305 6437976 3.1 RBIs net foreign exchange assets (3.1.1 - 3.1.2) 5550947 5287013 5753296 5851725 5840396 3.1.1 Gross foreign assets 5550956 5287015 5753292 5851722 5840398 3.1.2 Foreign liabilities 9 2 -4 -4 2 3.2 Other banks’ net foreign exchange assets 597580 366707 597580 597580 597580 4 Government’s Currency Liabilities to the Public 36632 34065 37291 37291 37652 5 Banking Sector’s Net Non-monetary Liabilities 6067843 4558981 5589878 5915376 5660130 5 Banking Sectors Net Non-monetary Liabilities (Including Merger) (6477524) (5035160) (5980400) (6306639) (6048576) 5.1 Net non-monetary liabilities of RBI 2147427 1631829 2099222 2181690 2168644 5.2 Net non-monetary liabilities of other banks (residual) 3920417 2927152 3490656 3733686 3491487 5.2 Net non-monetary liabilities of other banks (residual) (Including Merger) (4330098) (3403331) (3881177) (4124949) (3879932) M₃(1+2+3+4–5) 27227143 25701708 27934898 27842794 28177829 M3 (1+2+3+4-5) (Including Merger) (27286589) (25791104) (27989937) (27896574) (28230456) Figures in parentheses include the impact of merger of a non-bank with bank. RBI Bulletin August 2025 133CURRENT STATISTICS No. 8: Monetary Survey (₹ Crore) Item Outstanding as on March 31/last reporting Fridays of the month/reporting Fridays 2024-25 2024 2025 Jun. 28 May 30 Jun. 13 Jun. 27 1 2 3 4 5 Monetary Aggregates NM₁ (1.1+1.2.1+1.3) 6584081 6288057 6978559 6855711 7046725 NM₂ (NM₁ + 1.2.2.1) 15741937 14915653 16278082 16167286 16423308 NM2 (NM1 + 1.2.2.1) (Including Merger) (15768688) (14955882) (16302849) (16191486) (16446990) NM₃ (NM₂ +1.2.2.2 + 1.4 = 2.1 + 2.2 + 2.3 – 2.4 – 2.5) 27850121 26224953 28539892 28386562 28733795 NM3 (NM2 + 1.2.2.2 + 1.4 = 2.1 + 2.2 + 2.3 - 2.4 - 2.5) (Including Merger) (27909568) (26314350) (28594932) (28440341) (28786422) 1 Components 1.1 Currency with the Public 3630751 3446055 3736896 3744990 3722652 1.2 Aggregate Deposits of Residents 23190815 21918672 23797136 23694264 24052227 1.2 Aggregate Deposits of Residents (Including Merger) (23250261) (22008068) (23852176) (23748044) (24104854) 1.2.1 Demand Deposits 2840023 2746237 3131530 3001877 3215375 1.2.2 Time Deposits of Residents 20350792 19172435 20665606 20692388 20836852 1.2.2 Time Deposits of Residents (Including Merger) (20410239) (19261832) (20720646) (20746167) (20889478) 1.2.2.1 Short-term Time Deposits 9157856 8627596 9299523 9311574 9376583 1.2.2.1 Short-term Time Deposits (Including Merger) (9184607) (8667824) (9324291) (9335775) (9400265) 1.2.2.1.1 Certificates of Deposits (CDs) 527375 407354 516544 479167 516691 1.2.2.2 Long-term Time Deposits 11192936 10544839 11366083 11380813 11460269 1.2.2.2 Long-term Time Deposits (Including Merger) (11225631) (10594007) (11396355) (11410392) (11489213) 1.3 'Other' Deposits with RBI 113307 95766 110133 108844 108697 1.4 Call/Term Funding from Financial Institutions 915248 764461 895727 838463 850218 2 Sources 2.1 Domestic Credit 28333316 26021154 28414468 28590246 28607768 2.1 Domestic Credit (Including Merger) (28802443) (26586730) (28860029) (29035289) (29048840) 2.1.1 Net Bank Credit to the Government 8463065 7424141 8446563 8556270 8473446 2.1.1 Net Bank Credit to the Government (Including Merger) (8510825) (7489485) (8493151) (8602857) (8520033) 2.1.1.1 Net RBI credit to the Government 1508105 1026142 1479315 1602562 1513361 2.1.1.2 Credit to the Government by the Banking System 6954959 6397999 6967248 6953707 6960086 2.1.1.2 Credit to the Government by the Banking System (Including Merger) (7002720) (6463344) (7013836) (7000295) (7006672) 2.1.2 Bank Credit to the Commercial Sector 19870251 18597013 19967905 20033976 20134322 2.1.2 Bank Credit to the Commercial Sector (Including Merger) (20291618) (19097244) (20366878) (20432432) (20528808) 2.1.2.1 RBI Credit to the Commercial Sector 38246 10922 14393 10263 9029 2.1.2.2 Credit to the Commercial Sector by the Banking System 19832006 18586092 19953512 20023713 20125292 2.1.2.2 Credit to the Commercial Sector by the Banking System (Including Merger) (20253372) (19086322) (20352485) (20422168) (20519778) 2.1.2.2.1 Other Investments ( Non-SLR Securities) 1208294 1432378 1259726 1278661 1208081 2.2 Government's Currency Liabilities to the Public 36632 34065 37291 37291 37652 2.3 Net Foreign Exchange Assets of the Banking Sector 5605462 5180420 5821083 5867041 5954722 2.3.1 Net Foreign Exchange Assets of the RBI 5550947 5287013 5753296 5851725 5840396 2.3.2 Net Foreign Currency Assets of the Banking System 54514 -106593 67787 15316 114326 2.4 Capital Account 4481192 4258925 4956419 5035068 5040017 2.5 Other items (net) 2053777 1227940 1167053 1464211 1214776 Figures in parentheses include the impact of merger of a non-bank with a bank. 134 RBI Bulletin August 2025CURRENT STATISTICS No. 9: Liquidity Aggregates (₹ Crore) Aggregates 2024-25 2024 2025 Jun. Apr. May Jun. 1 2 3 4 5 1 NM₃ 27837333 26224953 28152487 28539892 28733795 (27896780) (26314350) (28211019) (28594932) (28786422) 2 Postal Deposits 756786 713570 756786 756786 756786 3 L₁ ( 1 + 2) 28594119 26938523 28909273 29296678 29490581 (28653566) (27027920) (28967805) (29351718) (29543208) 4 Liabilities of Financial Institutions 95148 68179 102284 116492 113786 4.1 Term Money Borrowings 10 748 4 4 5 4.2 Certificates of Deposit 80810 54670 87705 101755 98755 4.3 Term Deposits 14328 12761 14575 14733 15026 5 L₂ (3 + 4) 28689268 27006703 29011557 29413170 29604367 (28748714) (27096099) (29070089) (29468210) (29656993) 6 Public Deposits with Non-Banking Financial Companies 121178 109284 .. .. 129567 7 L₃ (5 + 6) 28810446 27115987 .. .. 29733934 Notes : 1 . Figures in the columns might not add up to the total due to rounding off of numbers. 2. Figures in parentheses include the impact of merger of a non-bank with a bank. RBI Bulletin August 2025 135CURRENT STATISTICS No. 10: Reserve Bank of India Survey (₹ Crore) Item Outstanding as on March 31/last reporting Fridays of the month/reporting Fridays 2024-25 2024 2025 Jun. 28 May 30 Jun. 13 Jun. 27 1 2 3 4 5 1 Components 1.1 Currency in Circulation 3724448 3563002 3835798 3847361 3821227 1.2 Bankers’ Deposits with the RBI 991488 1036368 1016571 993358 994142 1.2.1 Scheduled Commercial Banks 926001 973455 956086 932453 933483 1.3 ‘Other’ Deposits with the RBI 113307 95766 110133 108844 108697 Reserve Money (1.1 + 1.2 + 1.3 = 2.1 + 2.2 + 2.3 – 2.4 – 2.5) 4829243 4695137 4962501 4949563 4924066 2 Sources 2.1 RBI’s Domestic Credit 1389090 1005887 1271136 1242237 1214662 2.1.1 Net RBI credit to the Government 1508105 1026142 1479315 1602562 1513361 2.1.1.1 Net RBI credit to the Central Government (2.1.1.1.1 + 2.1.1.1.2 + 2.1.1.1.3 + 2.1.1.1.4 – 2.1.1.1.5) 1475460 1018898 1451876 1586643 1493338 2.1.1.1.1 Loans and Advances to the Central Government - - - - - 2.1.1.1.2 Investments in Treasury Bills - - - - - 2.1.1.1.3 Investments in dated Government Securities 1558574 1347914 1811677 1787961 1785715 2.1.1.1.3.1 Central Government Securities 1558574 1347914 1811677 1787961 1785715 2.1.1.1.4 Rupee Coins 329 237 297 324 449 2.1.1.1.5 Deposits of the Central Government 83443 329254 360099 201643 292826 2.1.1.2 Net RBI credit to State Governments 32646 7244 27439 15919 20023 2.1.2 RBI’s Claims on Banks -157261 -31176 -222572 -370589 -307728 2.1.2.1 Loans and Advances to Scheduled Commercial Banks -157261 -31176 -222572 -370589 -307728 2.1.3 RBI’s Credit to Commercial Sector 38246 10922 14393 10263 9029 2.1.3.1 Loans and Advances to Primary Dealers 9182 9061 8595 8471 7010 2.1.3.2 Loans and Advances to NABARD - - - - - 2.2 Government’s Currency Liabilities to the Public 36632 34065 37291 37291 37652 2.3 Net Foreign Exchange Assets of the RBI 5550947 5287013 5753296 5851725 5840396 2.3.1 Gold 668162 471350 721351 743180 722374 2.3.2 Foreign Currency Assets 4882794 4815665 5031941 5108541 5118023 2.4 Capital Account 1875114 1728614 2091368 2164551 2127550 2.5 Other Items (net) 272313 -96785 7854 17139 41094 No. 11: Reserve Money - Components and Sources (₹ Crore) Item Outstanding as on March 31/last Fridays of the month/Fridays 2024-25 2024 2025 Jun. 28 May 30 Jun. 6 Jun. 13 Jun. 20 Jun. 27 1 2 3 4 5 6 7 Reserve Money (1.1 + 1.2 + 1.3 = 2.1 + 2.2 + 2.3 + 2.4 + 2.5 – 2.6) 4829243 4695137 4962501 4957029 4949563 4937712 4924066 1 Components 1.1 Currency in Circulation 3724448 3563002 3835798 3851625 3847361 3829879 3821227 1.2 Bankers' Deposits with RBI 991488 1036368 1016571 998639 993358 999821 994142 1.3 ‘Other’ Deposits with RBI 113307 95766 110133 106766 108844 108012 108697 2 Sources 2.1 Net Reserve Bank Credit to Government 1508105 1026142 1479315 1576499 1602562 1524619 1513361 2.2 Reserve Bank Credit to Banks -157261 -31176 -222572 -323564 -370589 -301224 -307728 2.3 Reserve Bank Credit to Commercial Sector 38246 10922 14393 12551 10263 9113 9029 2.4 Net Foreign Exchange Assets of RBI 5550947 5287013 5753296 5803137 5851725 5877121 5840396 2.5 Government's Currency Liabilities to the Public 36632 34065 37291 37291 37291 37291 37652 2.6 Net Non- Monetary Liabilities of RBI 2147427 1631829 2099222 2148884 2181690 2209208 2168644 136 RBI Bulletin August 2025CURRENT STATISTICS No. 12: Commercial Bank Survey (₹ Crore) Item Outstanding as on last reporting Fridays of the month/ reporting Fridays of the month 2024-25 2024 2025 Jun. 28 May 30 Jun. 13 Jun. 27 1 2 3 4 5 1 Components 1.1 Aggregate Deposits of Residents 22228885 20954884 22826770 22721308 23078766 (22288331) (21044281) (22881810) (22775087) (23131393) 1.1.1 Demand Deposits 2698049 2601677 2988921 2859234 3072874 1.1.2 Time Deposits of Residents 19530836 18353206 19837850 19862074 20005892 (19590283) (18442603) (19892889) (19915853) (20058519) 1.1.2.1 Short-term Time Deposits 8788876 8258943 8927032 8937933 9002651 1.1.2.1.1 Certificates of Deposits (CDs) 527375 407354 516544 479167 516691 1.1.2.2 Long-term Time Deposits 10741960 10094264 10910817 10924141 11003241 1.2 Call/Term Funding from Financial Institutions 915248 764461 895727 838463 850218 2 Sources 2.1 Domestic Credit 25687563 23918212 25817693 25870437 25978666 (26156690) (24483787) (26263254) (26315479) (26419739) 2.1.1 Credit to the Government 6649537 6091725 6659581 6644387 6649761 (6697298) (6157070) (6706169) (6690975) (6696348) 2.1.2 Credit to the Commercial Sector 19038025 17826487 19158112 19226049 19328905 (19459392) (18326718) (19557085) (19624504) (19723391) 2.1.2.1 Bank Credit 17822605 16385798 17888404 17915507 18091714 (18243972) (16886029) (18287377) (18313963) (18486200) 2.1.2.1.1 Non-food Credit 17786074 16351894 17817823 17847902 18027325 (18207441) (16852125) (18216796) (18246357) (18421811) 2.1.2.2 Net Credit to Primary Dealers 15458 16136 18396 40274 37618 2.1.2.3 Investments in Other Approved Securities 630 1137 548 569 454 2.1.2.4 Other Investments (in non-SLR Securities) 1199332 1423416 1250763 1269699 1199119 2.2 Net Foreign Currency Assets of Commercial Banks (2.2.1-2.2.2-2.2.3) 54514 -106593 67787 15316 114326 2.2.1 Foreign Currency Assets 529621 304848 530021 477976 577466 2.2.2 Non-resident Foreign Currency Repatriable Fixed Deposits 292270 241215 290733 294696 294252 2.2.3 Overseas Foreign Currency Borrowings 182837 170226 171501 167964 168887 2.3 Net Bank Reserves (2.3.1+2.3.2-2.3.3) 791777 1109609 1265837 1393514 1327882 2.3.1 Balances with the RBI 882415 973455 956086 932453 933483 2.3.2 Cash in Hand 81874 104977 87179 90472 86671 2.3.3 Loans and Advances from the RBI 172512 -31176 -222572 -370589 -307728 2.4 Capital Account 2581908 2506141 2840880 2846347 2888296 2.5 Other items (net) (2.1+2.2+2.3-2.4-1.1-1.2) 807812 695742 587940 873149 603594 2.5.1 Other Demand and Time Liabilities (net of 2.2.3) 878795 759345 863072 938066 877929 2.5.2 Net Inter-Bank Liabilities (other than to PDs) 118268 148564 115343 140380 135597 Figures in parentheses include the impact of merger of a non-bank with a bank. No. 13: Scheduled Commercial Banks’ Investments (₹ Crore) Item As on 2024 2025 March 21, 2025 Jun. 28 May 30 Jun. 13 Jun. 27 1 2 3 4 5 1 SLR Securities 6697928 6158207 6706717 6691544 6696802 (6650167) (6092862) (6660129) (6644956) (6650215) 2 Other Government Securities (Non-SLR) 165500 157944 165432 160229 160012 3 Commercial Paper 63163 51636 87088 70960 63802 4 Shares issued by 4.1 PSUs 13874 13259 13263 13249 13929 4.2 Private Corporate Sector 95984 92861 98704 98749 98319 4.3 Others 7664 7014 7959 7806 7740 5 Bonds/Debentures issued by 5.1 PSUs 130308 119057 138380 138077 145868 5.2 Private Corporate Sector 248138 248618 254057 254353 260092 5.3 Others 150000 134187 157501 159546 152387 6 Instruments issued by 6.1 Mutual funds 119867 66115 127914 161081 91749 6.2 Financial institutions 204865 178493 204927 207844 205220 Notes: Data against column Nos. (1), (2) & (3) are final and for column Nos. (4) & (5) data are Provisional. 1. Data since July 14, 2023 include the impact of the merger of a non-bank with a bank. 2. Figures in parentheses exclude the impact of the merger. RBI Bulletin August 2025 137CURRENT STATISTICS No. 14: Business in India - All Scheduled Banks and All Scheduled Commercial Banks (₹ Crore) Item As on the Last Reporting Friday (in case of March)/ Last Friday All Scheduled Banks All Scheduled Commercial Banks 2024 2025 2024 2025 2024-25 2024-25 Jun. May Jun. Jun. May Jun. 1 2 3 4 5 6 7 8 Number of Reporting Banks 208 208 208 194 135 135 135 120 1 Liabilities to the Banking System 458011 513092 507039 502819 451305 508732 500764 496493 1.1 Demand and Time Deposits from Banks 315675 286043 370999 376973 309414 281970 365140 371106 1.2 Borrowings from Banks 112027 150174 110574 100647 111976 150168 110552 100641 1.3 Other Demand and Time Liabilities 30310 76875 25466 25199 29916 76594 25071 24746 2 Liabilities to Others 25053097 23563072 25610676 25831794 24557481 22979438 25102843 25322680 2.1 Aggregate Deposits 23055487 21847651 23662774 23916413 22580601 21285397 23172543 23425645 (22996040) (21758255) (23607734) (23863786) (22521155) (21196001) (23117503) (23373019) 2.1.1 Demand 2748263 2659582 3038379 3121680 2698049 2601677 2988921 3072874 2.1.2 Time 20307224 19188070 20624394 20794732 19882552 18683720 20183622 20352771 2.2 Borrowings 920568 769330 900194 854691 915248 764461 895727 850218 2.3 Other Demand and Time Liabilities 1077042 946090 1047708 1060690 1061632 929579 1034574 1046816 3 Borrowings from Reserve Bank 311466 102741 6516 1065 311466 102741 6516 1065 3.1 Against Usance Bills /Promissory Notes - - - - - - - - 3.2 Others 311466 102741 6516 1065 311466 102741 6516 1065 4 Cash in Hand and Balances with Reserve Bank 985044 1101330 1064842 1041975 964289 1078432 1043265 1020154 4.1 Cash in Hand 84399 107944 89605 89278 81874 104977 87179 86671 4.2 Balances with Reserve Bank 900645 993386 975237 952697 882415 973455 956086 933483 5 Assets with the Banking System 432645 456033 494019 490913 348496 376530 403817 398514 5.1 Balances with Other Banks 273720 255065 331989 340579 215801 200529 266765 273831 5.1.1 In Current Account 13239 16365 13853 25103 10619 12536 11435 22785 5.1.2 In Other Accounts 260481 238700 318135 315476 205182 187993 255331 251046 5.2 Money at Call and Short Notice 44772 31977 40689 42285 25838 11606 22813 24041 5.3 Advances to Banks 43856 51727 38542 33677 39504 50288 36148 31558 5.4 Other Assets 70296 117264 82799 74373 67353 114106 78092 69084 6 Investment 6850574 6356686 6861687 6854341 6697928 6158207 6706717 6696802 (6802814) (6291341) (6815099) (6807755) (6650167) (6092862) (6660129) (6650215) 6.1 Government Securities 6842024 6343630 6853140 6845977 6697298 6157070 6706169 6696348 6.2 Other Approved Securities 8550 13056 8547 8365 630 1137 548 454 7 Bank Credit 18708286 17413067 18753741 18956024 18243972 16886029 18287377 18486200 (18286919) (16912836) (18354768) (18561538) (17822605) (16385798) (17888404) (18091714) 7a Food Credit 87145 84526 122554 116363 36531 33904 70581 64389 7.1 Loans, Cash-credits and Overdrafts 18370704 17088089 18412982 18613283 17909851 16564523 17949958 18146380 7.2 Inland Bills-Purchased 76523 69416 80744 80511 74963 68064 79467 79560 7.3 Inland Bills-Discounted 222320 214682 223957 225234 221059 213232 222449 223845 7.4 Foreign Bills-Purchased 15357 17139 14063 14007 15122 16909 13866 13787 7.5 Foreign Bills-Discounted 23382 23741 21995 22988 22977 23301 21636 22627 Notes: 1. Data in column Nos. (4) & (8) are Provisional. 2. Data since July 2023 include the impact of the merger of a non-bank with a bank. 3. Figures in parentheses exclude the impact of the merger. 138 RBI Bulletin August 2025CURRENT STATISTICS No. 15: Deployment of Gross Bank Credit by Major Sectors (₹ Crore) Outstanding as on Growth(%) Mar. 21, Financial Sector 2025 2024 2025 year so far Y-o-Y Jun. 28 May 30 Jun. 27 2025-26 2025 1 2 3 4 % % I. Bank Credit (II + III) 18243936 16880782 18287597 18483098 1.3 9.5 (17822569) (16385798) (17888624) (18088612) (1.5) (10.4) II. Food Credit 36531 33904 70581 64389 76.3 89.9 III. Non-food Credit 18207404 16846879 18217016 18418709 1.2 9.3 (17786038) (16351894) (17818043) (18024223) (1.3) (10.2) 1. Agriculture & Allied Activities 2287071 2159559 2298815 2305993 0.8 6.8 2. Industry (Micro and Small, Medium and Large) 3937149 3728156 3881567 3932773 -0.1 5.5 (3925089) (3712270) (3869110) (3917824) (-0.2) (5.5) 2.1 Micro and Small 791721 731625 837079 872577 10.2 19.3 2.2 Medium 360475 316322 365914 357618 -0.8 13.1 2.3 Large 2784953 2680209 2678574 2702578 -3.0 0.8 3. Services 5161462 4707069 5090833 5130831 -0.6 9.0 (5094021) (4616040) (5018221) (5060940) (-0.6) (9.6) 3.1 Transport Operators 258409 242193 263377 256635 -0.7 6.0 3.2 Computer Software 32915 26677 33981 36232 10.1 35.8 3.3 Tourism, Hotels & Restaurants 83091 78351 85206 84781 2.0 8.2 3.4 Shipping 7305 7019 7793 8042 10.1 14.6 3.5 Aviation 46026 45360 46326 50750 10.3 11.9 3.6 Professional Services 195956 172138 196476 196406 0.2 14.1 3.7 Trade 1186787 1059459 1167392 1174129 -1.1 10.8 3.7.1. Wholesale Trade¹ 648619 557604 634298 629888 -2.9 13.0 3.7.2 Retail Trade 538168 501856 533094 544241 1.1 8.4 3.8 Commercial Real Estate 532757 483297 549874 555519 4.3 14.9 (488689) (421756) (505800) (513412) (5.1) (21.7) 3.9 Non-Banking Financial Companies (NBFCs)² of which, 1636098 1555496 1562646 1596490 -2.4 2.6 3.9.1 Housing Finance Companies (HFCs) 323146 328232 308740 331346 2.5 0.9 3.9.2 Public Financial Institutions (PFIs) 228678 197127 207146 211702 -7.4 7.4 3.10 Other Services³ 1182118 1037078 1177763 1171848 -0.9 13.0 (1166422) (1018174) (1157271) (1152057) (-1.2) (13.1) 4. Personal Loans 5952299 5486107 6061987 6150295 3.3 12.1 (5610478) (5091342) (5748146) (5840710) (4.1) (14.7) 4.1 Consumer Durables 23402 24123 23715 23376 -0.1 -3.1 4.2 Housing 3010477 2798568 3037366 3067120 1.9 9.6 (2689068) (2427447) (2742752) (2776336) (3.2) (14.4) 4.3 Advances against Fixed Deposits 141101 126533 142479 145540 3.1 15.0 4.4 Advances to Individuals against share & bonds 10080 9357 9412 9886 -1.9 5.7 4.5 Credit Card Outstanding 284366 273044 290678 292602 2.9 7.2 4.6 Education 137456 121990 138122 139587 1.6 14.4 4.7 Vehicle Loans 622794 588575 637766 652285 4.7 10.8 4.8 Loan against gold jewellery⁴ 208735 123776 251369 277025 32.7 123.8 4.9 Other Personal Loans 1513889 1420142 1531082 1542875 1.9 8.6 (1493525) (1396591) (1511895) (1524110) (2.0) (9.1) 5. Priority Sector (Memo) (i) Agriculture & Allied Activities⁵ 2287804 2186829 2277560 2274259 -0.6 4.0 (ii) Micro & Small Enterprises⁶ 2240503 2020474 2410013 2460012 9.8 21.8 (iii) Medium Enterprises⁷ 601451 511467 610129 591992 -1.6 15.7 (iv) Housing 746651 752911 750390 856626 14.7 13.8 (665107) (661668) (671007) (776086) (16.7) (17.3) (v) Education Loans 62825 61269 63146 64355 2.4 5.0 (vi) Renewable Energy 10325 6279 12250 12563 21.7 100.1 (vii) Social Infrastructure 1316 2949 827 828 -37.1 -71.9 (viii) Export Credit 12361 11721 12021 13047 5.5 11.3 (ix) Others 47900 60871 48675 46467 -3.0 -23.7 (x) Weaker Sections including net PSLC- SF/MF 1820904 1716930 1832723 1825579 0.3 6.3 Notes: (1) Data are provisional. Bank credit, Food credit and Non-food credit data are based on Section-42 return, which covers all scheduled commercial banks (SCBs), while sectoral non-food credit data are based on sector-wise and industry-wise bank credit (SIBC) return, which covers select banks accounting for about 95 per cent of total non-food credit extended by all SCBs, pertaining to the last reporting Friday of the month. (2) Data since July 28, 2023 include the impact of the merger of a non-bank with a bank. (3) Figures in parentheses exclude the impact of the merger. 1 Wholesale trade includes food procurement credit outside the food credit consortium. 2 NBFCs include HFCs, PFIs, Microfinance Institutions (MFIs), NBFCs engaged in gold loan and others. 3 “Other Services” include Mutual Fund (MFs), Banking and Finance other than NBFCs and MFs, and other services which are not indicated elsewhere under services. 4 Since May 2024, a bank has changed the classification of a category of agricultural loan into “Loans against gold jewellery” under retail segment. 5 “Agriculture and Allied Activities” under the priority sector also include priority sector lending certificates (PSLCs). 6 “Micro and Small Enterprises” under the priority sector include credit to micro and small enterprises in industry and services sectors and also include PSLCs. 7 “Medium Enterprises” under the priority sector include credit to medium enterprises in industry and services sectors. RBI Bulletin August 2025 139CURRENT STATISTICS No. 16: Industry-wise Deployment of Gross Bank Credit (₹ Crore) Outstanding as on Growth(%) Financial 2024 2025 Y-o-Y Mar. 21, year so far Industry 2025 Jun. 28 May 30 Jun. 27 2025-26 2025 1 2 3 4 % % 2 Industries (2.1 to 2.19) 3937149 3728156 3881567 3932773 -0.1 5.5 (3925089) (3712270) (3869110) (3917824) (-0.2) (5.5) 2.1 Mining & Quarrying (incl. Coal) 56756 55600 53904 56945 0.3 2.4 2.2 Food Processing 219527 206410 223657 223136 1.6 8.1 2.2.1 Sugar 28522 24945 25414 22862 -19.8 -8.4 2.2.2 Edible Oils & Vanaspati 20927 18123 20413 21342 2.0 17.8 2.2.3 Tea 5084 5853 4923 4950 -2.6 -15.4 2.2.4 Others 164994 157490 172908 173983 5.4 10.5 2.3 Beverage & Tobacco 35513 30518 34191 34636 -2.5 13.5 2.4 Textiles 277267 255274 272922 277281 0.0 8.6 2.4.1 Cotton Textiles 107227 96345 103651 105615 -1.5 9.6 2.4.2 Jute Textiles 4288 4245 4324 4411 2.9 3.9 2.4.3 Man-Made Textiles 49091 45229 47882 49102 0.0 8.6 2.4.4 Other Textiles 116661 109456 117065 118153 1.3 7.9 2.5 Leather & Leather Products 12980 12621 13164 13207 1.7 4.6 2.6 Wood & Wood Products 27826 24222 28239 28303 1.7 16.8 2.7 Paper & Paper Products 52848 47584 52519 52731 -0.2 10.8 2.8 Petroleum, Coal Products & Nuclear Fuels 154178 150054 137814 154602 0.3 3.0 2.9 Chemicals & Chemical Products 267814 254950 268394 271055 1.2 6.3 2.9.1 Fertiliser 32011 36925 32607 31958 -0.2 -13.5 2.9.2 Drugs & Pharmaceuticals 88738 81818 85831 86613 -2.4 5.9 2.9.3 Petro Chemicals 26892 25356 31822 31955 18.8 26.0 2.9.4 Others 120172 110852 118134 120529 0.3 8.7 2.10 Rubber, Plastic & their Products 103464 88917 101907 102610 -0.8 15.4 2.11 Glass & Glassware 13443 12340 13673 13243 -1.5 7.3 2.12 Cement & Cement Products 59752 60571 59400 59183 -1.0 -2.3 2.13 Basic Metal & Metal Product 433502 398182 430541 442055 2.0 11.0 2.13.1 Iron & Steel 300156 281763 293133 301600 0.5 7.0 2.13.2 Other Metal & Metal Product 133345 116419 137409 140455 5.3 20.6 2.14 All Engineering 240135 203490 239968 248780 3.6 22.3 2.14.1 Electronics 52862 45351 52810 55370 4.7 22.1 2.14.2 Others 187272 158139 187158 193411 3.3 22.3 2.15 Vehicles, Vehicle Parts & Transport Equipment 119057 113222 117522 121183 1.8 7.0 2.16 Gems & Jewellery 85734 84039 86968 88818 3.6 5.7 2.17 Construction 150701 137097 150908 150855 0.1 10.0 2.18 Infrastructure 1322831 1323860 1304228 1316796 -0.5 -0.5 2.18.1 Power 682953 646566 683712 695401 1.8 7.6 2.18.2 Telecommunications 118940 132542 101263 104278 -12.3 -21.3 2.18.3 Roads 311219 335841 316339 316840 1.8 -5.7 2.18.4 Airports 9156 7779 9428 9355 2.2 20.3 2.18.5 Ports 5916 6483 5182 5530 -6.5 -14.7 2.18.6 Railways 13595 13275 11487 11510 -15.3 -13.3 2.18.7 Other Infrastructure 181052 181374 176817 173882 -4.0 -4.1 2.19 Other Industries 303822 269206 291648 277354 -8.7 3.0 Notes: (1) Data since July 28, 2023 include the impact of the merger of a non-bank with a bank. (2) Figures in parentheses exclude the impact of the merger. 140 RBI Bulletin August 2025CURRENT STATISTICS No. 17: State Co-operative Banks Maintaining Accounts with the Reserve Bank of India (₹ Crore) Last Reporting Friday (in case of March)/Last Friday/ Item Reporting Friday 2024 2025 2024-25 May 31 Mar. 28 Apr. 04 Apr. 18 Apr. 25 May 02 May 16 May 30 1 2 3 4 5 6 7 8 9 Number of Reporting Banks 34 33 34 34 34 34 34 34 34 1 Aggregate Deposits (2.1.1.2+2.2.1.2) 146871.0 135938.7 146871.0 148566.3 145054.5 147251.7 147608.7 147866.9 145985.2 2 Demand and Time Liabilities 2.1 Demand Liabilities 2921 5.6 28297.6 29215.6 29503.5 27277.2 26936.5 28 452.9 2729 8.2 26758 .2 2.1.1 Deposits 2.1.1.1 Inter-Bank 9022.9 7482.3 9022.9 9328.0 8714.1 8298.2 8119.3 8033.8 7428.2 2.1.1.2 Others 14063.9 15241.7 14063.9 14165.7 13668.7 14069.6 1 4 316.8 13861.7 11836.7 2.1.2 Borrowings from Banks 700.0 154.9 700.0 350.0 1289.0 824.2 2912.2 2.1.3 Other Demand Liabilities 5428.9 5418.7 5428.9 6009.9 4544.4 4568.8 4727.9 4578.4 4581.2 2.2 Time Liabilities 201100.7 187897.4 201100.7 203978.3 199471.9 199412.2 199704.6 200375.1 199917.5 2.2.1 Deposits 2.2.1.1 Inter-Bank 66874.3 65382.8 66874.3 68122.4 66627.7 64779.7 64977.2 64945.2 64334.4 2.2.1.2 Others 132807.1 120697.0 132807.1 134400.6 131385.8 133182.1 133291.9 134005.2 134148.5 2.2.2 Borrowings from Banks 643.9 663.8 643.9 618.0 615.5 615.5 615.5 615.5 615.5 2.2.3 Other Time Liabilities 775.4 1153.8 775.4 837.3 842.9 834.9 820.0 809.2 819.0 3 Borrowing from Reserve Bank 699.5 699.5 699.8 499.9 499.8 499.8 499.8 499.8 4 Borrowings from a notified bank / Government 126928.5 84175.6 126928.5 123828.0 120340.2 117224.0 113687.2 112391.9 113039.0 4.1 Demand 53459.8 23112.7 53459.8 51798.7 50684.0 50291.4 48334.5 47731.0 47805.0 4.2 Time 73468.7 61062.9 73468.7 72029.3 69656.2 66932.6 65352.6 64660.9 65234.0 5 Cash in Hand and Balances with Reserve Bank 13390.9 12165.3 13390.9 15154.0 15967.2 19115.8 12935.0 15919.7 16813.3 5.1 Cash in Hand 1052.1 714.6 1052.1 1157.2 813.7 741.3 970.1 756.2 772.5 5.2 Balance with Reserve Bank 12338.8 11450.7 12338.8 13996.8 15153.5 18374.6 11964.9 15163.5 16040.7 6 Balances with Other Banks in Current Account 1656.3 1528.5 1656.3 1727.6 1856.2 1487.3 1306.3 1197.9 1102.6 7 Investments in Government Securities 77220.1 76376.5 77220.1 77215.6 79265.3 78742.6 78309.8 79425.0 79798.1 8 Money at Call and Short Notice 26531.1 21180.5 26531.1 30596.7 22162.6 20185.1 22926.3 53472.9 21442.9 9 Bank Credit (10.1+11) 174828.8 135733.7 174828.8 174139.0 174573.0 185733.8 173379.6 173468.6 173065.3 10 Advances 10.1 Loans, Cash-Credits and Overdrafts 174590.4 135524.3 174590.4 173853.1 174312.5 185468.1 173105.4 173203.9 172775.8 10.2 Due from Banks 12460 7.6 136109.4 124607.6 121776.9 119426.7 1 18050.3 116 990.1 11648 4.5 116407. 6 11 Bills Purchased and Discounted 238.4 209.4 238.4 285.8 260.5 265.6 274.2 264.7 289.5 RBI Bulletin August 2025 141CURRENT STATISTICS Prices and Production No. 18: Consumer Price Index (Base: 2012=100) Group/Sub group 2024-25 Rural Urban Combined Rural Urban Combined Jul.24 Jun.25 Jul.25 (P) Jul.24 Jun.25 Jul.25 (P) Jul.24 Jun.25 Jul.25 (P) 1 2 3 4 5 6 7 8 9 10 11 12 1 Food and beverages 198.6 205.3 201.1 200.4 194.9 198.4 208.3 203.5 207.0 203.3 198.1 201.6 1.1 Cereals and products 195.0 193.7 194.6 191.4 197.1 197.0 191.2 197.5 197.3 191.3 197.2 197.1 1.2 Meat and fish 222.3 231.9 225.7 227.1 227.0 225.5 237.4 237.9 236.3 230.7 230.8 229.3 1.3 Egg 192.8 197.5 194.6 192.5 192.9 196.4 197.2 198.8 202.3 194.3 195.2 198.7 1.4 Milk and products 186.3 187.0 186.6 185.6 190.0 190.4 186.6 191.6 192.2 186.0 190.6 191.1 1.5 Oils and fats 175.4 165.5 171.8 163.4 193.7 197.9 157.1 179.4 182.0 161.1 188.4 192.1 1.6 Fruits 188.3 194.2 191.0 181.4 203.8 210.1 192.4 211.9 217.2 186.5 207.6 213.4 1.7 Vegetables 222.1 269.6 238.2 248.8 175.0 196.3 303.4 219.0 242.6 267.3 189.9 212.0 1.8 Pulses and products 208.0 213.5 209.8 211.5 184.6 182.8 218.0 189.0 187.2 213.7 186.1 184.3 1.9 Sugar and confectionery 130.4 132.6 131.2 130.4 134.7 134.7 132.3 136.4 136.4 131.0 135.3 135.3 1.10 Spices 228.5 223.9 227.0 229.4 221.7 221.7 225.0 219.0 219.2 227.9 220.8 220.9 1.11 Non-alcoholic beverages 185.2 173.9 180.5 183.0 190.0 190.9 172.1 180.0 180.5 178.4 185.8 186.6 1.12 Prepared meals, snacks, sweets 199.4 209.7 204.2 197.6 204.6 205.3 207.2 216.7 217.4 202.1 210.2 210.9 2 Pan, tobacco and intoxicants 207.3 212.6 208.7 206.5 211.0 211.6 212.9 217.3 217.9 208.2 212.7 213.3 3 Clothing and footwear 197.9 186.7 193.5 196.7 201.0 201.3 185.5 190.4 190.8 192.3 196.8 197.1 3.1 Clothing 198.8 188.8 194.9 197.5 202.0 202.2 187.6 192.6 193.0 193.6 198.3 198.6 3.2 Footwear 192.7 174.7 185.2 191.8 195.1 195.5 173.8 177.9 178.2 184.3 188.0 188.3 4 Housing -- 181.5 181.5 -- -- -- 180.0 184.8 185.7 180.0 184.8 185.7 5 Fuel and light 181.2 169.7 176.9 180.0 184.1 184.0 169.5 175.4 175.2 176.0 180.8 180.7 6 Miscellaneous 189.3 180.7 185.1 187.9 196.7 197.4 179.3 187.4 188.1 183.7 192.2 192.9 6.1 Household goods and services 185.7 177.1 181.6 184.3 188.1 188.4 175.6 180.5 180.9 180.2 184.5 184.9 6.2 Health 198.4 193.2 196.4 196.5 204.5 205.4 191.4 199.3 200.3 194.6 202.5 203.5 6.3 Transport and communication 175.5 164.8 169.9 175.5 179.0 179.4 164.8 167.9 168.1 169.9 173.2 173.5 6.4 Recreation and amusement 180.1 175.5 177.5 179.0 182.3 182.8 174.2 178.6 178.7 176.3 180.2 180.5 6.5 Education 190.8 186.2 188.1 190.6 195.8 196.7 185.0 192.1 193.5 187.3 193.6 194.8 6.6 Personal care and effects 204.3 206.2 205.1 199.8 228.6 229.8 201.3 230.8 231.9 200.4 229.5 230.7 General Index (All Groups) 194.9 190.0 192.6 195.3 195.5 197.6 190.3 192.6 194.2 193.0 194.2 196.0 Source: National Statistical Office, Ministry of Statistics and Programme Implementation, Government of India. P: Provisional No. 19: Other Consumer Price Indices Item Base Year Linking 2024-25 2024 2025 Factor Jun. May Jun. 1 2 3 4 5 6 1 Consumer Price Index for Industrial Workers 2016 2.88 142.6 141.4 144.0 145.0 2 Consumer Price Index for Agricultural Labourers 2019 9.69 - 132.2 133.1 134.1 3 Consumer Price Index for Rural Labourers 2019 9.78 - 132.1 133.4 134.4 Source: Labour Bureau, Ministry of Labour and Employment, Government of India. No. 20: Monthly Average Price of Gold and Silver in Mumbai Item 2024-25 2024 2025 Jun. May Jun. 1 2 3 4 1 Standard Gold (₹ per 10 grams) 75842 72014 94590 97176 2 Silver (₹ per kilogram) 89131 88666 96026 105444 Source: India Bullion & Jewellers Association Ltd., Mumbai for Gold and Silver prices in Mumbai. 142 RBI Bulletin August 2025CURRENT STATISTICS No. 21: Wholesale Price Index (Base: 2011-12 = 100) Commodities Weight 2024-25 2024 2025 Jul. May Jun.(P) Jul.(P) 1 2 3 4 5 6 1 ALL COMMODITIES 100.000 154.9 155.3 153.7 153.8 154.4 1.1 PRIMARY ARTICLES 22.618 192.5 197.8 184.8 185.8 188.0 1.1.1 FOOD ARTICLES 15.256 205.3 213.1 196.8 197.8 199.7 1.1.1.1 Food Grains (Cereals+Pulses) 3.462 210.1 208.1 204.0 203.0 204.1 1.1.1.2 Fruits & Vegetables 3.475 241.4 277.6 203.8 212.2 220.9 1.1.1.3 Milk 4.440 185.8 186.0 190.1 189.7 190.1 1.1.1.4 Eggs, Meat & Fish 2.402 173.4 173.7 176.6 174.0 171.8 1.1.1.5 Condiments & Spices 0.529 232.7 237.0 200.8 199.5 200.0 1.1.1.6 Other Food Articles 0.948 213.6 207.8 224.9 222.8 221.0 1.1.2 NON-FOOD ARTICLES 4.119 161.7 158.9 158.5 160.9 164.3 1.1.2.1 Fibres 0.839 161.4 163.9 163.5 163.2 165.0 1.1.2.2 Oil Seeds 1.115 181.5 180.2 184.0 190.6 197.8 1.1.2.3 Other non-food Articles 1.960 138.7 137.1 137.8 137.7 137.7 1.1.2.4 Floriculture 0.204 277.4 232.6 198.5 210.9 234.5 1.1.3 MINERALS 0.833 229.0 226.6 228.4 231.5 229.0 1.1.3.1 Metallic Minerals 0.648 219.2 212.4 219.9 223.9 219.6 1.1.3.2 Other Minerals 0.185 263.4 276.5 257.9 258.1 261.7 1.1.4 CRUDE PETROLEUM & NATURAL GAS 2.410 151.3 157.9 138.8 136.8 140.3 1.2 FUEL & POWER 13.152 150.0 148.2 142.9 143.0 144.6 1.2.1 COAL 2.138 135.6 135.6 136.7 136.9 136.3 1.2.1.1 Coking Coal 0.647 143.4 143.4 146.4 146.4 146.4 1.2.1.2 Non-Coking Coal 1.401 125.8 125.8 126.6 126.6 126.6 1.2.1.3 Lignite 0.090 232.4 232.0 224.5 227.3 215.0 1.2.2 MINERAL OILS 7.950 156.2 157.4 146.6 146.7 149.6 1.2.3 ELECTRICITY 3.064 144.1 132.9 137.9 137.8 137.3 1.3 MANUFACTURED PRODUCTS 64.231 142.6 141.7 145.0 144.8 144.6 1.3.1 MANUFACTURE OF FOOD PRODUCTS 9.122 172.0 166.1 178.4 177.5 177.3 1.3.1.1 Processing and Preserving of meat 0.134 155.7 155.7 157.2 158.2 158.4 1.3.1.2 Processing and Preserving of fish, Crustaceans, Molluscs and products thereof 0.204 144.9 141.9 146.2 146.2 146.6 1.3.1.3 Processing and Preserving of fruit and Vegetables 0.138 132.6 131.8 136.0 135.7 135.9 1.3.1.4 Vegetable and Animal oils and Fats 2.643 168.5 149.3 185.7 182.6 182.2 1.3.1.5 Dairy products 1.165 180.8 178.5 183.5 183.9 183.8 1.3.1.6 Grain mill products 2.010 186.9 184.9 186.1 185.5 185.7 1.3.1.7 Starches and Starch products 0.110 167.0 169.4 156.8 154.1 152.8 1.3.1.8 Bakery products 0.215 170.5 167.3 176.4 176.7 176.6 1.3.1.9 Sugar, Molasses & honey 1.163 139.1 138.3 144.1 143.2 143.0 1.3.1.10 Cocoa, Chocolate and Sugar confectionery 0.175 160.6 155.2 176.4 178.7 177.3 1.3.1.11 Macaroni, Noodles, Couscous and Similar farinaceous products 0.026 156.7 150.8 158.7 159.7 160.6 1.3.1.12 Tea & Coffee products 0.371 190.7 205.9 199.9 201.7 198.9 1.3.1.13 Processed condiments & salt 0.163 192.6 191.6 189.8 189.4 190.6 1.3.1.14 Processed ready to eat food 0.024 152.7 151.9 156.5 156.2 156.6 1.3.1.15 Health supplements 0.225 185.1 184.6 187.2 189.4 187.8 1.3.1.16 Prepared animal feeds 0.356 204.1 207.4 199.0 199.6 200.8 1.3.2 MANUFACTURE OF BEVERAGES 0.909 134.1 133.5 135.4 135.6 135.2 1.3.2.1 Wines & spirits 0.408 136.0 135.1 138.9 138.7 138.3 1.3.2.2 Malt liquors and Malt 0.225 138.7 138.2 140.0 139.4 140.1 1.3.2.3 Soft drinks; Production of mineral waters and Other bottled waters 0.275 127.5 127.3 126.6 127.8 126.4 1.3.3 MANUFACTURE OF TOBACCO PRODUCTS 0.514 177.8 176.7 181.8 181.1 179.9 1.3.3.1 Tobacco products 0.514 177.8 176.7 181.8 181.1 179.9 RBI Bulletin August 2025 143CURRENT STATISTICS No. 21: Wholesale Price Index (Contd.) (Base: 2011-12 = 100) Commodities Weight 2024-25 2024 2025 Jul. May Jun.(P) Jul.(P) 1 2 3 4 5 6 1.3.4 MANUFACTURE OF TEXTILES 4.881 136.3 136.8 136.3 136.6 136.6 1.3.4.1 Preparation and Spinning of textile fibres 2.582 121.4 122.4 120.3 120.3 119.9 1.3.4.2 Weaving & Finishing of textiles 1.509 158.3 158.2 159.9 160.6 161.0 1.3.4.3 Knitted and Crocheted fabrics 0.193 124.0 125.0 124.7 125.2 125.3 1.3.4.4 Made-up textile articles, Except apparel 0.299 160.4 159.1 160.7 160.9 161.1 1.3.4.5 Cordage, Rope, Twine and Netting 0.098 142.7 141.1 150.7 151.8 155.3 1.3.4.6 Other textiles 0.201 134.9 136.7 132.8 132.1 133.1 1.3.5 MANUFACTURE OF WEARING APPAREL 0.814 153.4 152.2 155.2 155.6 156.0 1.3.5.1 Manufacture of Wearing Apparel (woven), Except fur Apparel 0.593 150.9 150.1 153.3 153.7 154.1 1.3.5.2 Knitted and Crocheted apparel 0.221 160.1 157.7 160.2 160.5 161.0 1.3.6 MANUFACTURE OF LEATHER AND RELATED PRODUCTS 0.535 125.3 124.4 127.6 127.6 127.6 1.3.6.1 Tanning and Dressing of leather; Dressing and Dyeing of fur 0.142 106.1 103.8 112.4 112.3 112.1 1.3.6.2 Luggage, HandbAgs, Saddlery and Harness 0.075 142.5 141.9 141.1 141.3 141.0 1.3.6.3 Footwear 0.318 129.7 129.4 131.2 131.2 131.3 1.3.7 MANUFACTURE OF WOOD AND PRODUCTS OF WOOD AND CORK 0.772 149.2 149.4 150.2 150.4 150.1 1.3.7.1 Saw milling and Planing of wood 0.124 141.1 140.2 142.3 142.6 141.6 1.3.7.2 Veneer sheets; Manufacture of plywood, Laminboard, Particle board and Other panels and Boards 0.493 148.6 149.0 149.3 149.4 149.3 1.3.7.3 Builder's carpentry and Joinery 0.036 215.3 215.6 215.4 215.4 215.3 1.3.7.4 Wooden containers 0.119 140.6 141.2 142.5 143.3 142.7 1.3.8 MANUFACTURE OF PAPER AND PAPER PRODUCTS 1.113 139.2 138.5 140.1 140.5 139.8 1.3.8.1 Pulp, Paper and Paperboard 0.493 144.6 144.7 144.6 144.3 143.8 1.3.8.2 Corrugated paper and Paperboard and Containers of paper and Paperboard 0.314 147.3 144.9 151.2 151.2 151.1 1.3.8.3 Other articles of paper and Paperboard 0.306 122.4 121.9 121.5 123.4 121.9 1.3.9 PRINTING AND REPRODUCTION OF RECORDED MEDIA 0.676 187.3 186.5 189.0 189.6 190.3 1.3.9.1 Printing 0.676 187.3 186.5 189.0 189.6 190.3 1.3.10 MANUFACTURE OF CHEMICALS AND CHEMICAL PRODUCTS 6.465 136.5 136.7 137.2 137.2 137.0 1.3.10.1 Basic chemicals 1.433 138.6 137.6 142.3 141.8 141.2 1.3.10.2 Fertilizers and Nitrogen compounds 1.485 143.1 143.4 143.3 143.0 142.9 1.3.10.3 Plastic and Synthetic rubber in primary form 1.001 133.6 135.3 133.3 133.8 134.6 1.3.10.4 Pesticides and Other agrochemical products 0.454 128.8 128.9 132.6 132.1 131.2 1.3.10.5 Paints, Varnishes and Similar coatings, Printing ink and Mastics 0.491 139.5 140.2 137.3 137.2 136.3 1.3.10.6 Soap and Detergents, Cleaning and Polishing preparations, Perfumes and Toilet preparations 0.612 139.7 138.8 141.9 142.3 142.6 1.3.10.7 Other chemical products 0.692 135.4 136.1 133.5 133.6 133.1 1.3.10.8 Man-made fibres 0.296 104.9 107.0 101.3 102.9 103.5 1.3.11 MANUFACTURE OF PHARMACEUTICALS, MEDICINAL CHEMICAL AND BOTANICAL PRODUCTS 1.993 144.3 144.7 145.9 145.9 146.0 1.3.11.1 Pharmaceuticals, Medicinal chemical and Botanical products 1.993 144.3 144.7 145.9 145.9 146.0 1.3.12 MANUFACTURE OF RUBBER AND PLASTICS PRODUCTS 2.299 129.0 129.1 129.3 129.4 129.1 1.3.12.1 Rubber Tyres and Tubes; Retreading and Rebuilding of Rubber Tyres 0.609 115.6 114.6 116.0 115.9 115.2 1.3.12.2 Other Rubber Products 0.272 112.1 112.9 113.5 113.2 114.3 1.3.12.3 Plastics products 1.418 138.1 138.5 138.0 138.3 137.9 1.3.13 MANUFACTURE OF OTHER NON-METALLIC MINERAL PRODUCTS 3.202 131.5 130.0 133.6 133.2 133.5 1.3.13.1 Glass and Glass products 0.295 163.2 163.4 163.6 163.6 163.5 1.3.13.2 Refractory products 0.223 121.6 118.8 123.4 123.1 123.7 1.3.13.3 Clay Building Materials 0.121 124.4 119.0 133.5 131.0 129.3 1.3.13.4 Other Porcelain and Ceramic Products 0.222 124.6 124.6 125.9 125.8 125.6 1.3.13.5 Cement, Lime and Plaster 1.645 130.4 128.7 133.0 132.3 133.1 144 RBI Bulletin August 2025CURRENT STATISTICS No. 21: Wholesale Price Index (Contd.) (Base: 2011-12 = 100) Commodities Weight 2024-25 2024 2025 Jul. May Jun.(P) Jul.(P) 1 2 3 4 5 6 1.3.13.6 Articles of Concrete, Cement and Plaster 0.292 139.2 138.3 140.6 140.2 139.5 1.3.13.7 Cutting, Shaping and Finishing of Stone 0.234 134.4 133.2 137.3 138.8 138.0 1.3.13.8 Other Non-Metallic Mineral Products 0.169 95.2 95.7 94.2 94.6 94.9 1.3.14 MANUFACTURE OF BASIC METALS 9.646 139.7 140.8 140.2 138.8 137.5 1.3.14.1 Inputs into steel making 1.411 133.6 135.6 132.9 131.8 131.2 1.3.14.2 Metallic Iron 0.653 141.8 148.4 133.2 129.5 128.6 1.3.14.3 Mild Steel - Semi Finished Steel 1.274 117.9 118.7 118.5 117.2 116.2 1.3.14.4 Mild Steel -Long Products 1.081 140.4 139.7 138.7 137.4 135.4 1.3.14.5 Mild Steel - Flat products 1.144 134.2 138.8 135.4 134.6 133.0 1.3.14.6 Alloy steel other than Stainless Steel- Shapes 0.067 135.4 136.5 135.9 134.2 130.8 1.3.14.7 Stainless Steel - Semi Finished 0.924 131.1 130.8 137.5 128.8 122.6 1.3.14.8 Pipes & tubes 0.205 164.7 166.3 167.5 167.2 163.2 1.3.14.9 Non-ferrous metals incl. precious metals 1.693 157.4 156.2 160.2 161.3 162.7 1.3.14.10 Castings 0.925 144.9 145.2 143.4 144.0 143.4 1.3.14.11 Forgings of steel 0.271 172.2 171.6 176.6 177.9 173.9 1.3.15 MANUFACTURE OF FABRICATED METAL PRODUCTS, EXCEPT MACHINERY AND EQUIPMENT 3.155 136.0 136.3 137.7 137.2 136.6 1.3.15.1 Structural Metal Products 1.031 130.8 131.1 132.2 131.5 131.5 1.3.15.2 Tanks, Reservoirs and Containers of Metal 0.660 149.5 151.4 153.4 151.5 149.7 1.3.15.3 Steam generators, Except Central Heating Hot Water Boilers 0.145 109.8 111.5 112.2 112.1 112.5 1.3.15.4 Forging, Pressing, Stamping and Roll-Forming of Metal; Powder Metallurgy 0.383 138.0 135.6 135.6 136.7 133.8 1.3.15.5 Cutlery, Hand Tools and General Hardware 0.208 102.0 101.7 103.6 104.7 104.8 1.3.15.6 Other Fabricated Metal Products 0.728 144.9 145.1 147.2 146.6 147.2 1.3.16 MANUFACTURE OF COMPUTER, ELECTRONIC AND OPTICAL PRODUCTS 2.009 121.5 121.1 122.0 122.3 122.5 1.3.16.1 Electronic Components 0.402 117.9 117.7 120.6 120.3 120.8 1.3.16.2 Computers and Peripheral Equipment 0.336 134.2 136.0 131.4 131.4 131.4 1.3.16.3 Communication Equipment 0.310 146.0 145.4 146.8 146.9 147.0 1.3.16.4 Consumer Electronics 0.641 101.1 100.5 100.8 100.8 100.6 1.3.16.5 Measuring, Testing, Navigating and Control equipment 0.181 119.9 118.1 121.9 126.6 126.6 1.3.16.6 Watches and Clocks 0.076 167.9 163.1 174.0 173.7 173.3 1.3.16.7 Irradiation, Electromedical and Electrotherapeutic equipment 0.055 114.4 111.1 111.7 109.9 115.4 1.3.16.8 Optical instruments and Photographic equipment 0.008 107.4 106.7 111.2 114.6 118.1 1.3.17 MANUFACTURE OF ELECTRICAL EQUIPMENT 2.930 133.7 133.4 134.4 134.6 134.6 1.3.17.1 Electric motors, Generators, Transformers and Electricity distribution and Control apparatus 1.298 132.3 131.1 132.9 133.0 132.7 1.3.17.2 Batteries and Accumulators 0.236 141.3 141.7 144.4 144.3 144.8 1.3.17.3 Fibre optic cables for data transmission or live transmission of images 0.133 118.6 120.7 115.5 114.5 115.7 1.3.17.4 Other electronic and Electric wires and Cables 0.428 154.4 154.4 157.6 158.2 158.6 1.3.17.5 Wiring devices, Electric lighting & display equipment 0.263 118.4 119.0 118.4 118.5 118.2 1.3.17.6 Domestic appliances 0.366 131.8 132.1 129.8 130.1 130.4 1.3.17.7 Other electrical equipment 0.206 123.4 123.3 125.9 126.0 125.5 1.3.18 MANUFACTURE OF MACHINERY AND EQUIPMENT 4.789 130.8 130.5 131.9 132.3 132.3 1.3.18.1 Engines and Turbines, Except aircraft, Vehicle and Two wheeler engines 0.638 132.8 133.0 135.1 136.6 136.6 1.3.18.2 Fluid power equipment 0.162 134.5 134.5 134.6 134.4 134.8 1.3.18.3 Other pumps, Compressors, Taps and Valves 0.552 118.5 118.2 119.5 119.5 120.2 1.3.18.4 Bearings, Gears, Gearing and Driving elements 0.340 128.5 128.0 129.0 130.7 130.0 1.3.18.5 Ovens, Furnaces and Furnace burners 0.008 86.6 86.7 88.1 87.9 88.2 1.3.18.6 Lifting and Handling equipment 0.285 130.0 130.3 131.2 131.0 131.0 RBI Bulletin August 2025 145CURRENT STATISTICS No. 21: Wholesale Price Index (Concld.) (Base: 2011-12 = 100) Commodities Weight 2024-25 2024 2025 Jul. May Jun.(P) Jul.(P) 1 2 3 4 5 6 1.3.18.7 Office machinery and Equipment 0.006 130.2 130.2 130.2 130.2 130.2 1.3.18.8 Other general-purpose machinery 0.437 145.3 146.8 144.9 143.8 141.8 1.3.18.9 Agricultural and Forestry machinery 0.833 145.5 143.5 146.8 146.8 146.4 1.3.18.10 Metal-forming machinery and Machine tools 0.224 123.2 122.7 126.0 126.2 127.4 1.3.18.11 Machinery for mining, Quarrying and Construction 0.371 89.8 89.0 92.5 92.9 93.0 1.3.18.12 Machinery for food, Beverage and Tobacco processing 0.228 126.1 126.0 126.3 126.3 128.0 1.3.18.13 Machinery for textile, Apparel and Leather production 0.192 141.4 139.3 138.9 139.6 139.6 1.3.18.14 Other special-purpose machinery 0.468 144.9 145.3 145.8 146.9 147.5 1.3.18.15 Renewable electricity generating equipment 0.046 69.2 69.7 69.2 69.4 69.4 1.3.19 MANUFACTURE OF MOTOR VEHICLES, TRAILERS AND SEMI-TRAILERS 4.969 129.9 130.0 130.6 130.5 130.7 1.3.19.1 Motor vehicles 2.600 130.6 130.8 131.1 131.0 131.2 1.3.19.2 Parts and Accessories for motor vehicles 2.368 129.1 129.2 130.0 130.0 130.1 1.3.20 MANUFACTURE OF OTHER TRANSPORT EQUIPMENT 1.648 145.2 144.6 149.7 150.4 151.1 1.3.20.1 Building of ships and Floating structures 0.117 180.5 177.9 190.7 190.7 190.7 1.3.20.2 Railway locomotives and Rolling stock 0.110 108.9 109.8 109.7 109.8 110.0 1.3.20.3 Motor cycles 1.302 146.0 145.3 150.6 151.3 152.1 1.3.20.4 Bicycles and Invalid carriages 0.117 134.9 136.0 136.7 137.1 138.2 1.3.20.5 Other transport equipment 0.002 163.2 160.2 165.9 165.8 165.9 1.3.21 MANUFACTURE OF FURNITURE 0.727 160.3 158.7 163.6 163.8 164.8 1.3.21.1 Furniture 0.727 160.3 158.7 163.6 163.8 164.8 1.3.22 OTHER MANUFACTURING 1.064 183.8 178.8 219.3 224.3 226.8 1.3.22.1 Jewellery and Related articles 0.996 185.4 180.0 223.2 228.6 231.1 1.3.22.2 Musical instruments 0.001 201.9 200.0 202.1 204.3 204.3 1.3.22.3 Sports goods 0.012 164.9 163.0 171.0 171.4 171.9 1.3.22.4 Games and Toys 0.005 163.1 162.2 162.4 162.6 160.2 1.3.22.5 Medical and Dental instruments and Supplies 0.049 158.6 158.6 158.6 157.6 162.1 2 FOOD INDEX 24.378 192.9 195.5 189.9 190.2 191.3 Source: Office of the Economic Adviser, Ministry of Commerce and Industry, Government of India. 146 RBI Bulletin August 2025CURRENT STATISTICS No. 22: Index of Industrial Production (Base:2011-12=100) Industry Weight 2023-24 2024-25 April-June June 2024-25 2025-26 2024 2025 1 2 3 4 5 6 7 General Index 100.00 146.7 152.6 151.2 154.2 151.0 153.3 1 Sectoral Classification 1.1 Mining 14.37 128.9 132.8 134.1 130.1 134.9 123.2 1.2 Manufacturing 77.63 144.7 150.6 147.2 152.2 146.6 152.3 1.3 Electricity 7.99 198.3 208.6 221.4 217.1 222.8 217.1 2 Use-Based Classification 2.1 Primary Goods 34.05 147.7 153.5 156.4 153.9 156.0 151.3 2.2 Capital Goods 8.22 106.6 112.6 103.9 114.3 111.3 115.2 2.3 Intermediate Goods 17.22 157.3 164.0 159.8 167.8 159.1 167.9 2.4 Infrastructure/ Construction Goods 12.34 176.3 188.2 185.1 196.7 184.9 198.3 2.5 Consumer Durables 12.84 118.6 128.0 125.6 128.9 127.1 130.8 2.6 Consumer Non-Durables 15.33 153.7 151.4 150.0 148.0 145.2 144.6 Source : Central Statistics Office, Ministry of Statistics and Programme Implementation, Government of India. Government Accounts and Treasury Bills No. 23: Union Government Accounts at a Glance (₹ Crore) Financial Year April – June 2025-26 Percentage to Budget Item (Budget 2025-26 2024-25 Estimates (Actuals) (Actuals) Estimates) 2025-26 2024-25 1 2 3 4 5 1 Revenue Receipts 3420409 913377 829677 26.7 26.5 1.1 Tax Revenue (Net) 2837409 540316 549633 19.0 21.3 1.2 Non-Tax Revenue 583000 373061 280044 64.0 51.3 2 Non Debt Capital Receipt 76000 28018 4520 36.9 5.8 2.1 Recovery of Loans 29000 5395 4516 18.6 16.1 2.2 Other Receipts 47000 22623 4 48.1 0.0 3 Total Receipts (excluding borrowings) (1+2) 3496409 941395 834197 26.9 26.0 4 Revenue Expenditure 3944255 946995 788858 24.0 21.3 of which : 4.1 Interest Payments 1276338 386037 264052 30.2 22.7 5 Capital Expenditure 1121090 275132 181051 24.5 16.3 6 Total Expenditure (4+5) 5065345 1222127 969909 24.1 20.1 7 Revenue Deficit (4-1) 523846 33618 -40819 6.4 -7.0 8 Fiscal Deficit (6-3) 1568936 280732 135712 17.9 8.4 9 Gross Primary Deficit (8-4.1) 292598 -105305 -128340 -36.0 -28.5 Source: Controller General of Accounts (CGA), Ministry of Finance, Government of India and Union Budget 2025-26. RBI Bulletin August 2025 147CURRENT STATISTICS No. 24: Treasury Bills – Ownership Pattern (₹ Crore) 2024-25 2024 2025 Item Jun. 28 May 23 May 30 Jun. 6 Jun. 13 Jun. 20 Jun. 27 1 2 3 4 5 6 7 8 1 91-day 1.1 Banks 26554 10411 21845 22722 19435 19575 18639 18898 1.2 Primary Dealers 25258 24135 34187 36058 37041 25717 21671 18582 1.3 State Governments 40315 46310 64691 62591 59491 64991 71291 80904 1.4 Others 115688 88554 101268 92319 89624 96108 96090 95120 2 182-day 2.1 Banks 44887 54590 53966 50567 50446 49643 51017 49943 2.2 Primary Dealers 62218 66312 59786 61807 61074 60332 55998 57055 2.3 State Governments 11078 14592 10688 11688 13688 16888 18888 16888 2.4 Others 104994 123098 89848 90226 90580 91925 93886 92901 3 364-day 3.1 Banks 72304 92592 71496 69501 72281 70431 71580 71571 3.2 Primary Dealers 86939 143140 74280 73306 72817 73170 74466 76439 3.3 State Governments 37389 38191 46232 46344 46279 46093 44898 45967 3.4 Others 162757 156268 156223 160193 158903 161399 160754 159789 4 14-day Intermediate 4.1 Banks 4.2 Primary Dealers 4.3 State Governments 188072 204835 146825 134728 126187 161628 156490 155018 4.4 Others 572 592 879 2166 1244 150 1297 428 Total Treasury Bills (Excluding 14 day 790381 858193 784511 777323 771658 776272 779176 784059 Intermediate T Bills) # # 14D intermediate T-Bills are non-marketable unlike 91D, 182D and 364D T-Bills. These bills are ‘intermediate’ by nature as these are liquidated to replenish shortfall in the daily minimum cash balances of State Governments. Note: Primary Dealers (PDs) include banks undertaking PD business. No. 25: Auctions of Treasury Bills (Amount in ₹ Crore) Date of Notified Bids Received Bids Accepted Total Cut- Implicit Yield Auction Amount Total Face Value Total Face Value Issue off at Cut-off Price Number Number (6+7) Price (per cent) Competitive Non- Competitive Non- ( ₹ ) Competitive Competitive 1 2 3 4 5 6 7 8 9 10 91-day Treasury Bills 2025-26 May 28 9000 102 30939 2819 37 8981 2819 11800 98.62 5.6200 Jun. 4 9000 125 43277 4524 33 8976 4524 13500 98.63 5.5796 Jun. 11 9000 132 33117 7520 42 8980 7520 16500 98.68 5.3694 Jun. 18 9000 133 36084 6320 46 8980 6320 15300 98.68 5.3575 Jun. 25 9000 126 26870 11516 66 8984 11516 20500 98.67 5.4094 182-day Treasury Bills 2025-26 May 28 5000 73 24766 2018 17 4982 2018 7000 97.27 5.6287 Jun. 4 5000 71 21002 4007 17 4993 4007 9000 97.28 5.5998 Jun. 11 5000 72 12546 5215 39 4985 5215 10200 97.36 5.4334 Jun. 18 5000 89 23389 2810 36 4990 2810 7800 97.35 5.4575 Jun. 25 5000 93 15026 6 50 4994 6 5000 97.31 5.5350 364-day Treasury Bills 2025-26 May 28 5000 110 29969 175 18 4948 175 5123 94.69 5.6288 Jun. 4 5000 77 24942 74 24 4943 74 5017 94.71 5.5995 Jun. 11 5000 61 10620 127 45 4957 127 5083 94.80 5.5000 Jun. 18 5000 94 24305 1037 31 4983 1037 6020 94.80 5.5000 Jun. 25 5000 87 19867 1531 45 4981 1531 6512 94.74 5.5687 148 RBI Bulletin August 2025CURRENT STATISTICS Financial Markets No. 26: Daily Call Money Rates (Per cent per annum) Range of Rates Weighted Average Rates As on Borrowings/ Lendings Borrowings/ Lendings 1 2 June 02 ,2025 4.85-5.85 5.79 June 03 ,2025 4.85-6.65 5.77 June 04 ,2025 4.85-5.85 5.75 June 05 ,2025 4.85-5.85 5.75 June 06 ,2025 4.85-5.50 5.42 June 09 ,2025 4.75-5.40 5.30 June 10 ,2025 4.75-5.35 5.30 June 11 ,2025 4.80-5.35 5.30 June 12 ,2025 4.35-5.40 5.29 June 13 ,2025 4.75-5.36 5.31 June 16 ,2025 4.75-5.35 5.30 June 17 ,2025 4.50-5.35 5.26 June 18 ,2025 4.75-5.35 5.27 June 19 ,2025 4.70-5.35 5.26 June 20 ,2025 4.75-5.35 5.27 June 21 ,2025 4.50-5.30 5.04 June 23 ,2025 4.75-5.35 5.27 June 24 ,2025 4.75-5.35 5.27 June 25 ,2025 4.75-5.35 5.29 June 26 ,2025 4.75-5.35 5.27 June 27 ,2025 4.75-5.60 5.38 June 30 ,2025 4.75-5.70 5.50 July 01 ,2025 4.75-5.40 5.31 July 02 ,2025 4.70-5.35 5.27 July 03 ,2025 4.75-5.35 5.26 July 04 ,2025 4.75-5.35 5.26 July 05 ,2025 4.70-5.30 4.91 July 07 ,2025 4.75-5.35 5.26 July 08 ,2025 4.50-5.35 5.26 July 09 ,2025 4.80-5.45 5.32 July 10 ,2025 4.75-5.45 5.35 July 11 ,2025 4.75-5.55 5.45 July 14 ,2025 4.75-5.40 5.31 July 15 ,2025 4.75-5.50 5.38 Note: Includes Notice Money. RBI Bulletin August 2025 149CURRENT STATISTICS No. 27: Certificates of Deposit 2024 2025 Item Jul. 26 Jun. 13 Jun. 27 Jul. 11 Jul. 25 1 2 3 4 5 1 Amount Outstanding (₹ Crore) 424747.21 483064.43 517439.00 525253.75 508451.73 1.1 Issued during the fortnight (₹ Crore) 23643.34 40924.08 85607.74 18575.50 18550.54 2 Rate of Interest (per cent) 7.02-7.26 5.65-7.04 5.77-6.63 5.67-6.49 5.59-6.63 No. 28: Commercial Paper Item 2024 2025 Jun. 30 May 15 May 31 Jun. 15 Jun. 30 Jul. 15 Jul. 31 1 2 3 4 5 6 7 1 Amount Outstanding (₹ Crore) 422447.45 541591.10 553874.25 549258.30 500000.60 534009.15 547229.30 1.1 Reported during the fortnight (₹ Crore) 56023.85 48973.55 81053.80 102447.00 58021.75 79530.05 73858.50 2 Rate of Interest (per cent) 6.99-15.06 6.44-10.14 5.97-12.23 5.67-11.63 5.71-13.84 5.51-12.67 5.57-13.84 No. 29: Average Daily Turnover in Select Financial Markets (₹ Crore) Item 2024-25 2024 2025 Jun. 28 May 23 May 30 Jun. 6 Jun. 13 Jun. 20 Jun. 27 1 2 3 4 5 6 7 8 1 Call Money 18990 23962 29606 26805 23489 31335 24157 28538 2 Notice Money 2506 3722 231 6439 209 219 6749 307 3 Term Money 941 613 2302 1687 785 1951 903 990 4 Triparty Repo 692068 799629 666649 824530 659923 784601 802836 702250 5 Market Repo 578912 663566 607184 719036 597129 759880 763218 632175 6 Repo in Corporate Bond 5212 3558 6682 6308 5913 9944 9639 8409 7 Forex (US $ million) 131877 135891 125401 140910 136313 128179 118707 165416 8 Govt. of India Dated Securities 56065 107938 153621 131774 109308 168382 132864 121551 9 State Govt. Securities 3971 9999 12737 7015 12804 6683 5182 4910 10 Treasury Bills 10.1 91-Day 2514 8036 4847 6333 5534 6572 6647 3997 10.2 182-Day 2218 5128 6110 2619 3721 7784 4672 3436 10.3 364-Day 1854 4984 4542 3368 3377 3940 3093 1967 10.4 Cash Management Bills 0 0 0 0 0 0 0 11 Total Govt. Securities (8+9+10) 66622 136084 181858 151109 134743 193361 152459 135862 11.1 RBI 1715 948 4324 54 850 769 816 596 150 RBI Bulletin August 2025CURRENT STATISTICS No. 30: New Capital Issues by Non-Government Public Limited Companies (Amount in ₹ Crore) 2024-25 2024-25 (Apr.-Jun.) 2025-26 (Apr.-Jun.) * Jun. 2024 Jun. 2025 * Security & Type of Issue No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount Issues Issues Issues Issues Issues 1 2 3 4 5 6 7 8 9 10 1 Equity Shares 464 210190 112 41280 73 23059 38 3571 40 15867 1.1 Public 322 190478 75 36381 45 15464 22 2521 24 9526 1.2 Rights 142 19712 37 4899 28 7594 16 1051 16 6341 2 Public Issue of 43 8149 10 2454 9 1436 3 560 1 83 Bonds/ Debentures 3 Total (1+2) 507 218339 122 43734 82 24495 41 4131 41 15951 3.1 Public 365 198627 85 38835 54 16900 25 3081 25 9609 3.2 Rights 142 19712 37 4899 28 7594 16 1051 16 6341 Notes : 1. Since April 2020, monthly data on equity issues is compiled on the basis of their listing date. 2. Figures in the columns might not add up to the total due to rounding off numbers. 3. The table covers only public and rights issuances of equity and debt. It does not include data on private placement of debt, qualified institutional placements and preferential allotments. Source : Securities and Exchange Board of India. * : Data is Provisional RBI Bulletin August 2025 151CURRENT STATISTICS External Sector No. 31: Foreign Trade 2024 2025 2024-25 Item Unit Jun. Feb. Mar. Apr. May Jun. 1 2 3 4 5 6 7 1 Exports ₹ Crore 3701070 293505 320532 363598 328021 327855 301901 US $ Million 437416 35163 36820 41968 38338 38485 35144 1.1 Oil ₹ Crore 534917 45821 49785 42467 61423 47820 39650 US $ Million 63341 5489 5719 4902 7179 5613 4616 1.2 Non-oil ₹ Crore 3166153 247684 270747 321131 266598 280035 262251 US $ Million 374075 29673 31101 37066 31159 32872 30529 2 Imports ₹ Crore 6089909 467413 443663 550211 555329 516260 463159 US $ Million 720241 55997 50964 63507 64904 60601 53916 2.1 Oil ₹ Crore 1570226 125703 103528 164684 177212 125635 118534 US $ Million 185779 15060 11892 19008 20712 14748 13799 2.2 Non-oil ₹ Crore 4519683 341709 340135 385527 378117 390624 344624 US $ Million 534462 40938 39071 44499 44193 45853 40118 3 Trade Balance ₹ Crore -2388839 -173907 -123131 -186613 -227308 -188405 -161257 US $ Million -282825 -20834 -14144 -21539 -26567 -22116 -18772 3.1 Oil ₹ Crore -1035309 -79882 -53743 -122217 -115789 -77815 -78884 US $ Million -122438 -9570 -6173 -14107 -13533 -9134 -9183 3.2 Non-oil ₹ Crore -1353530 -94025 -69388 -64395 -111519 -110590 -82373 US $ Million -160387 -11264 -7971 -7433 -13034 -12982 -9589 Note: Data in the table are provisional. Source: Directorate General of Commercial Intelligence and Statistics. No. 32: Foreign Exchange Reserves 2024 2025 Item Unit Aug. 02 Jun. 20 Jun. 27 Jul. 04 Jul. 11 Jul. 18 Jul. 25 1 2 3 4 5 6 7 1 Total Reserves ₹ Crore 5652457 6043697 6007745 5975266 5978149 5992373 6040880 US $ Million 674919 697935 702784 699736 696672 695489 698192 1.1 Foreign Currency Assets ₹ Crore 4958347 5100971 5084809 5049185 5052566 5062860 5095487 US $ Million 592039 589069 594823 591287 588810 587609 588926 1.2 Gold ₹ Crore 503330 742482 722374 724528 723791 728042 741528 US $ Million 60099 85743 84504 84846 84348 84499 85704 Volume (Metric Tonnes) 846.18 879.58 879.98 879.98 879.98 879.98 879.98 1.3 SDRs SDRs Million 13699 13707 13707 13707 13707 13707 13707 ₹ Crore 152096 161685 160963 161120 161343 160975 162741 US $ Million 18161 18672 18830 18868 18802 18683 18809 1.4 Reserve Tranche Position in IMF ₹ Crore 38685 38559 39598 40432 40448 40496 41125 US $ Million 4620 4452 4628 4735 4711 4698 4753 * Difference, if any, is due to rounding off. Note: Exclude investment in foreign currency denominated bonds issued by IIFC (UK), SDRs transferred by Government of India to RBI, foreign currency received under SAARC and ACU currency swap arrangements and RBI’s contribution to funding of Nexus Global Payments. Foreign currency assets in US dollar take into account appreciation/depreciation of non-US currencies (such as Euro, Sterling, Yen and Australian Dollar) held in reserves. Foreign exchange holdings are converted into rupees at rupee-US dollar RBI holding rates. No. 33: Non-Resident Deposits (US $ Million) Scheme Outstanding Flows 2024 2025 2024-25 2025-26 2024-25 Jun. May Jun. (P) Apr.-Jun. Apr.-Jun.(P) 1 2 3 4 5 6 1 NRI Deposits 164677 155782 166720 168327 4025 3614 1.1 FCNR(B) 32809 27414 33252 33583 1681 774 1.2 NR(E)RA 100733 100111 101862 102750 1582 1991 1.3 NRO 31135 28257 31606 31993 762 850 P: Provisional. 152 RBI Bulletin August 2025CURRENT STATISTICS No. 34: Foreign Investment Inflows (US $ Million) 2024-25 2025-26 (P) 2024 (P) 2025 (P) Item 2024-25 Apr.-Jun. Apr.-Jun. Jun. May Jun. 1 2 3 4 5 6 1.1 Net Foreign Direct Investment (1.1.1-1.1.2) 959 6224 4916 2242 -5 1075 1.1.1 Direct Investment to India (1.1.1.1-1.1.1.2) 29130 10606 12789 3557 2159 3554 1.1.1.1 Gross Inflows/Gross Investments 80615 22777 25178 7615 7173 9261 1.1.1.1.1 Equity 50993 16402 18852 5489 5232 6987 1.1.1.1.1.1 Government (SIA/FIPB) 2208 209 1360 118 60 1004 1.1.1.1.1.2 RBI 34686 11764 13527 3244 3494 5337 1.1.1.1.1.3 Acquisition of shares 13124 4205 3740 2052 1603 571 1.1.1.1.1.4 Equity capital of unincorporated bodies 975 224 224 75 75 75 1.1.1.1.2 Reinvested earnings 22759 5225 5225 1742 1742 1742 1.1.1.1.3 Other capital 6863 1151 1101 384 200 533 1.1.1.2 Repatriation/Disinvestment 51486 12171 12389 4057 5014 5707 1.1.1.2.1 Equity 49525 11673 11991 3891 4855 5623 1.1.1.2.2 Other capital 1960 498 398 166 159 84 1.1.2 Foreign Direct Investment by India 28171 4382 7872 1316 2165 2479 (1.1.2.1+1.1.2.2+1.1.2.3-1.1.2.4) 1.1.2.1 Equity capital 16945 2728 4396 844 655 1919 1.1.2.2 Reinvested Earnings 6846 1712 1712 571 571 571 1.1.2.3 Other Capital 7955 1090 2405 283 1006 445 1.1.2.4 Repatriation/Disinvestment 3575 1147 640 382 67 455 1.2 Net Portfolio Investment (1.2.1+1.2.2+1.2.3-1.2.4) 3564 945 847 5449 1554 2390 1.2.1 GDRs/ADRs - - - - - - 1.2.2 FIIs 3283 897 1638 5433 1700 2378 1.2.3 Offshore funds and others - - - - - - 1.2.4 Portfolio investment by India -281 -48 791 -16 146 -12 1 Foreign Investment Inflows 4523 7168 5763 7690 1549 3465 P: Provisional No. 35: Outward Remittances under the Liberalised Remittance Scheme (LRS) for Resident Individuals (US $ Million) 2024 2025 Item 2024-25 Jun. Apr. May Jun. 1 2 3 4 5 1 Outward Remittances under the LRS 29563.12 2181.85 2481.41 2313.16 2127.39 1.1 Deposit 705.26 39.02 94.15 54.65 42.12 1.2 Purchase of immovable property 322.82 18.77 44.69 41.69 37.75 1.3 Investment in equity/debt 1698.94 120.22 203.44 104.94 206.12 1.4 Gift 2938.69 228.81 290.89 233.30 190.51 1.5 Donations 11.81 2.01 1.57 1.98 1.26 1.6 Travel 16964.57 1275.63 1270.44 1389.23 1235.17 1.7 Maintenance of close relatives 3722.03 270.72 397.97 322.54 262.97 1.8 Medical Treatment 81.19 6.42 5.08 6.72 5.59 1.9 Studies Abroad 2918.91 177.07 163.56 149.78 138.76 1.10 Others 198.90 43.19 9.61 8.32 7.15 RBI Bulletin August 2025 153CURRENT STATISTICS No. 36: Indices of Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER) of the Indian Rupee 2024 2025 2023-24 2024-25 Jul. Jun. Jul. Item 1 2 3 4 5 40-Currency Basket (Base: 2015-16=100) 1 Trade-Weighted 1.1 NEER 90.75 91.02 91.91 86.94 86.57 1.2 REER 103.71 105.26 107.42 99.68 100.07 2 Export-Weighted 2.1 NEER 93.13 93.52 94.38 89.08 88.63 2.2 REER 101.22 102.34 104.45 97.08 97.34 6-Currency Basket (Trade-weighted) 1 Base : 2015-16 =100 1.1 NEER 83.62 82.38 83.39 79.06 78.58 1.2 REER 101.66 102.72 104.42 98.05 98.35 2 Base : 2022-23 =100 2.1 NEER 97.31 95.87 97.04 92.01 91.44 2.2 REER 99.86 100.90 102.57 96.31 96.60 Note: Data for 2024-25 and 2025-26 so far is provisional. 154 RBI Bulletin August 2025CURRENT STATISTICS No. 37: External Commercial Borrowings (ECBs) – Registrations (Amount in US $ Million) Item 2024-25 2024 2025 Jun. May Jun. 1 2 3 4 1 Automatic Route 1.1 Number 1328 121 100 112 1.2 Amount 47800 1811 2739 2733 2 Approval Route 2.1 Number 51 4 0 1 2.2 Amount 13384 1005 0 750 3 Total (1+2) 3.1 Number 1379 125 100 113 3.2 Amount 61184 2816 2739 3483 4 Weighted Average Maturity (in years) 5.05 5.80 4.80 4.90 5 Interest Rate (per cent) 5.1 Weighted Average Margin over alternative reference rate (ARR) for Floating Rate Loans@ 1.48 1.36 1.46 1.70 5.2 Interest rate range for Fixed Rate Loans 0.00-11.67 0.00-11.00 0.00-10.00 0.00-10.50 Borrower Category I. Corporate Manufacturing 13900 603 1201 954 II. Corporate-Infrastructure 15462 808 717 1819 a.) Transport 614 0 0 5 b.) Energy 6900 745 0 155 c.) Water and Sanitation 28 27 0 0 d.) Communication 13 0 0 0 e.) Social and Commercial Infrastructure 184 17 1 7 f.) Exploration,Mining and Refinery 5356 19 305 0 g.) Other Sub-Sectors 2367 0 411 1652 III. Corporate Service-Sector 3226 37 242 19 IV. Other Entities 1026 19 0 0 a.) units in SEZ 26 19 0 0 b.) SIDBI 0 0 0 0 c.) Exim Bank 1000 0 0 0 V. Banks 0 0 0 0 VI. Financial Institution (Other than NBFC ) 0 0 0 0 VII. NBFCs 26318 1311 566 682 a). NBFC- IFC/AFC 12389 1062 0 97 b). NBFC-MFI 459 38 86 18 c). NBFC-Others 13470 211 480 567 VIII. Non-Government Organization (NGO) 0 0 0 0 IX. Micro Finance Institution (MFI) 0 0 0 0 X. Others 1252 38 13 9 Note: Based on applications for ECB/Foreign Currency Convertible Bonds (FCCBs) which have been allotted loan registration number during the period. @ With effect from July 01, 2023, the benchmark rate is changed to Alternative Reference Rate (ARR). RBI Bulletin August 2025 155CURRENT STATISTICS No. 38: India’s Overall Balance of Payments (US$ Million) Jan.-Mar. 2024 Jan.-Mar. 2025 (P) Credit Debit Net Credit Debit Net Item 1 2 3 4 5 6 Overall Balance Of Payments (1+2+3) 502221 471468 30754 521618 512829 8789 1 Current Account (1.1+ 1.2) 253534 248967 4567 264919 251469 13451 1.1 Merchandise 121626 173645 -52019 116283 175762 -59478 1.2 Invisibles (1.2.1+1.2.2+1.2.3) 131908 75322 56586 148636 75707 72929 1.2.1 Services 89356 46672 42684 102019 48711 53308 1.2.1.1 Travel 9961 8063 1898 9097 7934 1162 1.2.1.2 Transportation 7771 7829 -58 8151 8385 -234 1.2.1.3 Insurance 927 650 277 886 762 124 1.2.1.4 G.n.i.e. 129 315 -186 165 330 -165 1.2.1.5 Miscellaneous 70568 29814 40753 83720 31299 52421 1.2.1.5.1 Software Services 41551 4908 36643 46917 5434 41483 1.2.1.5.2 Business Services 22620 16388 6232 29432 16221 13212 1.2.1.5.3 Financial Services 1599 1269 330 1989 795 1193 1.2.1.5.4 Communication Services 498 506 -7 731 533 198 1.2.2 Transfers 32097 3378 28719 34717 3214 31504 1.2.2.1 Official 51 282 -231 31 376 -345 1.2.2.2 Private 32046 3096 28950 34686 2838 31848 1.2.3 Income 10455 25272 -14817 11900 23782 -11882 1.2.3.1 Investment Income 8523 24233 -15710 9873 22750 -12877 1.2.3.2 Compensation of Employees 1932 1039 893 2027 1032 995 2 Capital Account (2.1+2.2+2.3+2.4+2.5) 248044 222501 25543 255786 261361 -5574 2.1 Foreign Investment (2.1.1+2.1.2) 159056 145366 13691 144464 149956 -5492 2.1.1 Foreign Direct Investment 20179 17881 2299 18494 18127 366 2.1.1.1 In India 19474 11411 8063 17527 7474 10053 2.1.1.1.1 Equity 12762 10934 1829 9610 7199 2411 2.1.1.1.2 Reinvested Earnings 5332 5332 6165 6165 2.1.1.1.3 Other Capital 1379 477 902 1751 275 1476 2.1.1.2 Abroad 706 6470 -5764 967 10653 -9686 2.1.1.2.1 Equity 706 3208 -2503 967 6321 -5354 2.1.1.2.2 Reinvested Earnings 0 1446 -1446 0 1712 -1712 2.1.1.2.3 Other Capital 0 1815 -1815 0 2620 -2620 2.1.2 Portfolio Investment 138877 127485 11392 125970 131829 -5859 2.1.2.1 In India 138217 126638 11579 124923 130917 -5995 2.1.2.1.1 FIIs 138217 126638 11579 124923 130917 -5995 2.1.2.1.1.1 Equity 120784 119426 1358 101683 115225 -13541 2.1.2.1.1.2 Debt 17432 7212 10221 23239 15693 7547 2.1.2.1.2 ADR/GDRs 0 0 0 0 2.1.2.2 Abroad 660 847 -187 1048 912 136 2.2 Loans (2.2.1+2.2.2+2.2.3) 31787 27899 3888 56056 50511 5544 2.2.1 External Assistance 3587 1562 2025 3712 1641 2071 2.2.1.1 By India 8 31 -23 6 25 -19 2.2.1.2 To India 3579 1531 2048 3706 1616 2090 2.2.2 Commercial Borrowings 15121 13472 1649 38786 30910 7876 2.2.2.1 By India 3401 4308 -907 23141 22668 473 2.2.2.2 To India 11719 9164 2555 15645 8242 7403 2.2.3 Short Term to India 13079 12865 214 13558 17961 -4403 2.2.3.1 Buyers' credit & Suppliers' Credit >180 days 12000 12865 -865 13558 16205 -2647 2.2.3.2 Suppliers' Credit up to 180 days 1079 0 1079 0 1755 -1755 2.3 Banking Capital (2.3.1+2.3.2) 40722 33811 6911 33573 42550 -8977 2.3.1 Commercial Banks 39768 33811 5957 33573 42331 -8758 2.3.1.1 Assets 9220 12330 -3110 6486 17652 -11166 2.3.1.2 Liabilities 30548 21481 9067 27087 24678 2408 2.3.1.2.1 Non-Resident Deposits 26041 20678 5363 26288 23458 2830 2.3.2 Others 955 0 955 0 219 -219 2.4 Rupee Debt Service 7 -7 7 -7 2.5 Other Capital 16479 15418 1060 21694 18336 3358 3 Errors & Omissions 643 0 643 912 0 912 4 Monetary Movements (4.1+ 4.2) 0 30754 -30754 0 8789 -8789 4.1 I.M.F. 0 0 0 0 0 0 4.2 Foreign Exchange Reserves (Increase - / Decrease +) 30754 -30754 8789 -8789 Note: P: Preliminary. 156 RBI Bulletin August 2025CURRENT STATISTICS No. 39: India’s Overall Balance of Payments (₹ Crore) Jan.-Mar. 2024 Jan.-Mar. 2025 (P) Credit Debit Net Credit Debit Net Item 1 2 3 4 5 6 Overall Balance Of Payments (1+2+3) 4169814 3914475 255339 4519960 4443804 76155 1 Current Account (1.1+ 1.2) 2105027 2067106 37921 2295597 2179044 116553 1.1 Merchandise 1009832 1441729 -431897 1007628 1523023 -515395 1.2 Invisibles (1.2.1+1.2.2+1.2.3) 1095194 625377 469817 1287969 656021 631948 1.2.1 Services 741899 387502 354397 884018 422093 461925 1.2.1.1 Travel 82705 66948 15758 78826 68754 10072 1.2.1.2 Transportation 64519 65002 -483 70629 72660 -2031 1.2.1.3 Insurance 7698 5395 2303 7675 6603 1071 1.2.1.4 G.n.i.e. 1073 2616 -1543 1432 2860 -1429 1.2.1.5 Miscellaneous 585904 247541 338363 725457 271215 454242 1.2.1.5.1 Software Services 344986 40752 304234 406549 47084 359465 1.2.1.5.2 Business Services 187807 136067 51740 255039 140555 114484 1.2.1.5.3 Financial Services 13280 10537 2743 17232 6892 10339 1.2.1.5.4 Communication Services 4136 4197 -61 6333 4618 1715 1.2.2 Transfers 266491 28049 238442 300834 27848 272987 1.2.2.1 Official 423 2344 -1921 273 3259 -2986 1.2.2.2 Private 266068 25705 240363 300561 24588 275973 1.2.3 Income 86804 209826 -123022 103117 206080 -102963 1.2.3.1 Investment Income 70763 201199 -130436 85554 197135 -111581 1.2.3.2 Compensation of Employees 16041 8627 7414 17563 8945 8618 2 Capital Account (2.1+2.2+2.3+2.4+2.5) 2059444 1847368 212076 2216458 2264761 -48303 2.1 Foreign Investment (2.1.1+2.1.2) 1320601 1206932 113669 1251821 1299413 -47592 2.1.1 Foreign Direct Investment 167544 148458 19086 160253 157078 3175 2.1.1.1 In India 161684 94741 66943 151875 64767 87108 2.1.1.1.1 Equity 105963 90780 15183 83277 62383 20894 2.1.1.1.2 Reinvested Earnings 44274 0 44274 53422 0 53422 2.1.1.1.3 Other Capital 11447 3960 7487 15176 2384 12792 2.1.1.2 Abroad 5860 53718 -47858 8378 92311 -83933 2.1.1.2.1 Equity 5860 26638 -20778 8378 54774 -46396 2.1.1.2.2 Reinvested Earnings 0 12009 -12009 0 14831 -14831 2.1.1.2.3 Other Capital 0 15071 -15071 0 22706 -22706 2.1.2 Portfolio Investment 1153057 1058474 94583 1091568 1142335 -50767 2.1.2.1 In India 1147577 1051439 96139 1082489 1134435 -51945 2.1.2.1.1 FIIs 1147577 1051439 96139 1082489 1134435 -51945 2.1.2.1.1.1 Equity 1002841 991563 11278 881113 998454 -117341 2.1.2.1.1.2 Debt 144736 59875 84861 201376 135981 65395 2.1.2.1.2 ADR/GDRs 0 0 0 0 0 0 2.1.2.2 Abroad 5480 7035 -1555 9079 7900 1178 2.2 Loans (2.2.1+2.2.2+2.2.3) 263920 231641 32279 485737 437694 48043 2.2.1 External Assistance 29784 12969 16816 32166 14220 17945 2.2.1.1 By India 66 255 -188 52 217 -166 2.2.1.2 To India 29718 12714 17004 32114 14003 18111 2.2.2 Commercial Borrowings 125543 111856 13688 336088 267839 68248 2.2.2.1 By India 28241 35769 -7528 200522 196420 4102 2.2.2.2 To India 97302 76086 21216 135565 71419 64146 2.2.3 Short Term to India 108592 106817 1775 117484 155634 -38150 2.2.3.1 Buyers' credit & Suppliers' Credit >180 days 99631 106817 -7185 117484 140424 -22940 2.2.3.2 Suppliers' Credit up to 180 days 8961 0 8961 0 15210 -15210 2.3 Banking Capital (2.3.1+2.3.2) 338106 280721 57384 290917 368705 -77788 2.3.1 Commercial Banks 330180 280721 49459 290917 366806 -75889 2.3.1.1 Assets 76548 102370 -25822 56203 152962 -96758 2.3.1.2 Liabilities 253632 178351 75281 234713 213844 20870 2.3.1.2.1 Non-Resident Deposits 216214 171683 44531 227792 203268 24524 2.3.2 Others 7926 0 7926 0 1899 -1899 2.4 Rupee Debt Service 0 60 -60 0 62 -62 2.5 Other Capital 136818 128013 8804 187982 158886 29096 3 Errors & Omissions 5343 0 5343 7905 0 7905 4 Monetary Movements (4.1+ 4.2) 0 255339 -255339 0 76155 -76155 4.1 I.M.F. 0 0 0 0 0 0 4.2 Foreign Exchange Reserves (Increase - / Decrease +) 0 255339 -255339 0 76155 -76155 Note: P: Preliminary. RBI Bulletin August 2025 157CURRENT STATISTICS No. 40: Standard Presentation of BoP in India as per BPM6 (US$ Million) Item Jan.-Mar. 2024 Jan.-Mar. 2025 (P) Credit Debit Net Credit Debit Net 1 2 3 4 5 6 1 Current Account (1.A+1.B+1.C) 253531 248945 4586 264919 251439 13480 1.A Goods and Services (1.A.a+1.A.b) 210982 220317 -9334 218302 224473 -6171 1.A.a Goods (1.A.a.1 to 1.A.a.3) 121626 173645 -52019 116283 175762 -59478 1.A.a.1 General merchandise on a BOP basis 121327 164054 -42727 116068 166261 -50193 1.A.a.2 Net exports of goods under merchanting 300 0 300 216 0 216 1.A.a.3 Nonmonetary gold 9591 -9591 9501 -9501 1.A.b Services (1.A.b.1 to 1.A.b.13) 89356 46672 42684 102019 48711 53308 1.A.b.1 Manufacturing services on physical inputs owned by others 352 18 335 280 46 235 1.A.b.2 Maintenance and repair services n.i.e. 55 456 -401 98 292 -193 1.A.b.3 Transport 7771 7829 -58 8151 8385 -234 1.A.b.4 Travel 9961 8063 1898 9097 7934 1162 1.A.b.5 Construction 1658 791 867 1553 820 733 1.A.b.6 Insurance and pension services 927 650 277 886 762 124 1.A.b.7 Financial services 1599 1269 330 1989 795 1193 1.A.b.8 Charges for the use of intellectual property n.i.e. 319 3365 -3046 376 4358 -3981 1.A.b.9 Telecommunications, computer, and information services 42137 5707 36430 47738 6309 41430 1.A.b.10 Other business services 22620 16388 6232 29432 16221 13212 1.A.b.11 Personal, cultural, and recreational services 1253 1496 -243 1270 1470 -199 1.A.b.12 Government goods and services n.i.e. 129 315 -186 165 330 -165 1.A.b.13 Others n.i.e. 575 324 251 983 990 -7 1.B Primary Income (1.B.1 to 1.B.3) 10455 25272 -14817 11900 23782 -11882 1.B.1 Compensation of employees 1932 1039 893 2027 1032 995 1.B.2 Investment income 6758 23555 -16797 7800 22296 -14497 1.B.2.1 Direct investment 2518 13929 -11411 2743 13132 -10389 1.B.2.2 Portfolio investment 94 2383 -2289 110 1937 -1827 1.B.2.3 Other investment 874 7015 -6141 846 7048 -6203 1.B.2.4 Reserve assets 3272 229 3043 4101 179 3923 1.B.3 Other primary income 1765 678 1087 2074 454 1620 1.C Secondary Income (1.C.1+1.C.2) 32093 3356 28737 34717 3184 31532 1.C.1 Financial corporations, nonfinancial corporations, households, and NPISHs 32046 3096 28950 34686 2838 31848 1.C.1.1 Personal transfers (Current transfers between resident and/non-resident households) 31301 2324 28977 33936 2096 31839 1.C.1.2 Other current transfers 745 772 -27 750 741 9 1.C.2 General government 48 260 -212 31 347 -316 2 Capital Account (2.1+2.2) 182 138 44 198 279 -81 2.1 Gross acquisitions (DR.)/disposals (CR.) of non-produced nonfinancial assets 21 50 -30 16 112 -96 2.2 Capital transfers 161 87 74 182 166 16 3 Financial Account (3.1 to 3.5) 247865 253139 -5274 255589 269900 -14311 3.1 Direct Investment (3.1A+3.1B) 20179 17881 2299 18494 18127 366 3.1.A Direct Investment in India 19474 11411 8063 17527 7474 10053 3.1.A.1 Equity and investment fund shares 18095 10934 7161 15776 7199 8576 3.1.A.1.1 Equity other than reinvestment of earnings 12762 10934 1829 9610 7199 2411 3.1.A.1.2 Reinvestment of earnings 5332 5332 6165 6165 3.1.A.2 Debt instruments 1379 477 902 1751 275 1476 3.1.A.2.1 Direct investor in direct investment enterprises 1379 477 902 1751 275 1476 3.1.B Direct Investment by India 706 6470 -5764 967 10653 -9686 3.1.B.1 Equity and investment fund shares 706 4655 -3949 967 8033 -7066 3.1.B.1.1 Equity other than reinvestment of earnings 706 3208 -2503 967 6321 -5354 3.1.B.1.2 Reinvestment of earnings 1446 -1446 1712 -1712 3.1.B.2 Debt instruments 0 1815 -1815 0 2620 -2620 3.1.B.2.1 Direct investor in direct investment enterprises 1815 -1815 2620 -2620 3.2 Portfolio Investment 138877 127485 11392 125970 131829 -5859 3.2.A Portfolio Investment in India 138217 126638 11579 124923 130917 -5995 3.2.1 Equity and investment fund shares 120784 119426 1358 101683 115225 -13541 3.2.2 Debt securities 17432 7212 10221 23239 15693 7547 3.2.B Portfolio Investment by India 660 847 -187 1048 912 136 3.3 Financial derivatives (other than reserves) and employee stock options 6126 9280 -3154 4928 12389 -7461 3.4 Other investment 82683 67739 14944 106197 98766 7430 3.4.1 Other equity (ADRs/GDRs) 0 0 0 0 0 0 3.4.2 Currency and deposits 26996 20678 6318 26288 23677 2611 3.4.2.1 Central bank (Rupee Debt Movements; NRG) 955 0 955 0 219 -219 3.4.2.2 Deposit-taking corporations, except the central bank (NRI Deposits) 26041 20678 5363 26288 23458 2830 3.4.2.3 General government 0 0 3.4.2.4 Other sectors 0 0 3.4.3 Loans (External Assistance, ECBs and Banking Capital) 32434 28167 4267 49782 51423 -1641 3.4.3.A Loans to India 29025 23828 5197 26636 28731 -2095 3.4.3.B Loans by India 3409 4339 -929 23147 22693 454 3.4.4 Insurance, pension, and standardized guarantee schemes 54 85 -31 56 630 -574 3.4.5 Trade credit and advances 13079 12865 214 13558 17961 -4403 3.4.6 Other accounts receivable/payable - other 10120 5945 4175 16512 5076 11437 3.4.7 Special drawing rights 0 0 3.5 Reserve assets 0 30754 -30754 0 8789 -8789 3.5.1 Monetary gold 0 0 3.5.2 Special drawing rights n.a. 0 0 3.5.3 Reserve position in the IMF n.a. 0 0 3.5.4 Other reserve assets (Foreign Currency Assets) 0 30754 -30754 0 8789 -8789 4 Total assets/liabilities 247865 253139 -5274 255589 269900 -14311 4.1 Equity and investment fund shares 146425 145227 1198 124457 144387 -19929 4.2 Debt instruments 91320 71214 20107 114619 111649 2970 4.3 Other financial assets and liabilities 10120 36698 -26578 16512 13864 2648 5 Net errors and omissions 643 0 643 912 0 912 Note: P: Preliminary. 158 RBI Bulletin August 2025CURRENT STATISTICS No. 41: Standard Presentation of BoP in India as per BPM6 (₹ Crore) Jan.-Mar. 2024 Jan.-Mar. 2025 (P) Item Credit Debit Net Credit Debit Net 1 2 3 4 5 6 1 Current Account (1.A+1.B+1.C) 2104999 2066922 38077 2295593 2178790 116804 1.A Goods and Services (1.A.a+1.A.b) 1751732 1829231 -77500 1891646 1945116 -53470 1.A.a Goods (1.A.a.1 to 1.A.a.3) 1009832 1441729 -431897 1007628 1523023 -515395 1.A.a.1 General merchandise on a BOP basis 1007344 1362098 -354753 1005759 1440693 -434934 1.A.a.2 Net exports of goods under merchanting 2488 0 2488 1868 0 1868 1.A.a.3 Nonmonetary gold 0 79632 -79632 0 82330 -82330 1.A.b Services (1.A.b.1 to 1.A.b.13) 741899 387502 354397 884018 422093 461925 1.A.b.1 Manufacturing services on physical inputs owned by others 2923 146 2778 2429 397 2032 1.A.b.2 Maintenance and repair services n.i.e. 455 3786 -3331 852 2528 -1676 1.A.b.3 Transport 64519 65002 -483 70629 72660 -2031 1.A.b.4 Travel 82705 66948 15758 78826 68754 10072 1.A.b.5 Construction 13763 6567 7196 13459 7104 6355 1.A.b.6 Insurance and pension services 7698 5395 2303 7675 6603 1071 1.A.b.7 Financial services 13280 10537 2743 17232 6892 10339 1.A.b.8 Charges for the use of intellectual property n.i.e. 2648 27942 -25294 3261 37760 -34499 1.A.b.9 Telecommunications, computer, and information services 349851 47384 302467 413664 54665 358999 1.A.b.10 Other business services 187807 136067 51740 255039 140555 114484 1.A.b.11 Personal, cultural, and recreational services 10404 12421 -2016 11007 12735 -1729 1.A.b.12 Government goods and services n.i.e. 1073 2616 -1543 1432 2860 -1429 1.A.b.13 Others n.i.e. 4771 2691 2081 8514 8579 -64 1.B Primary Income (1.B.1 to 1.B.3) 86804 209826 -123022 103117 206080 -102963 1.B.1 Compensation of employees 16041 8627 7414 17563 8945 8618 1.B.2 Investment income 56107 195572 -139465 67585 193203 -125618 1.B.2.1 Direct investment 20904 115646 -94742 23767 113792 -90025 1.B.2.2 Portfolio investment 782 19786 -19004 951 16786 -15835 1.B.2.3 Other investment 7255 58240 -50985 7328 61075 -53747 1.B.2.4 Reserve assets 27166 1900 25266 35540 1549 33990 1.B.3 Other primary income 14656 5627 9029 17969 3932 14037 1.C Secondary Income (1.C.1+1.C.2) 266464 27865 238599 300830 27593 273237 1.C.1 Financial corporations, nonfinancial corporations, households, and NPISHs 266068 25705 240363 300561 24588 275973 1.C.1.1 Personal transfers (Current transfers between resident and/non-resident households) 259885 19295 240591 294061 18164 275897 1.C.1.2 Other current transfers 6183 6410 -227 6501 6424 76 1.C.2 General government 396 2160 -1764 269 3005 -2736 2 Capital Account (2.1+2.2) 1509 1144 364 1714 2414 -699 2.1 Gross acquisitions (DR.)/disposals (CR.) of non-produced nonfinancial assets 171 419 -248 136 971 -835 2.2 Capital transfers 1338 725 613 1578 1443 135 3 Financial Account (3.1 to 3.5) 2057963 2101748 -43785 2214747 2338757 -124010 3.1 Direct Investment (3.1A+3.1B) 167544 148458 19086 160253 157078 3175 3.1.A Direct Investment in India 161684 94741 66943 151875 64767 87108 3.1.A.1 Equity and investment fund shares 150237 90780 59457 136699 62383 74316 3.1.A.1.1 Equity other than reinvestment of earnings 105963 90780 15183 83277 62383 20894 3.1.A.1.2 Reinvestment of earnings 44274 0 44274 53422 0 53422 3.1.A.2 Debt instruments 11447 3960 7487 15176 2384 12792 3.1.A.2.1 Direct investor in direct investment enterprises 11447 3960 7487 15176 2384 12792 3.1.B Direct Investment by India 5860 53718 -47858 8378 92311 -83933 3.1.B.1 Equity and investment fund shares 5860 38647 -32787 8378 69605 -61227 3.1.B.1.1 Equity other than reinvestment of earnings 5860 26638 -20778 8378 54774 -46396 3.1.B.1.2 Reinvestment of earnings 0 12009 -12009 0 14831 -14831 3.1.B.2 Debt instruments 0 15071 -15071 0 22706 -22706 3.1.B.2.1 Direct investor in direct investment enterprises 0 15071 -15071 0 22706 -22706 3.2 Portfolio Investment 1153057 1058474 94583 1091568 1142335 -50767 3.2.A Portfolio Investment in India 1147577 1051439 96139 1082489 1134435 -51945 3.2.1 Equity and investment fund shares 1002841 991563 11278 881113 998454 -117341 3.2.2 Debt securities 144736 59875 84861 201376 135981 65395 3.2.B Portfolio Investment by India 5480 7035 -1555 9079 7900 1178 3.3 Financial derivatives (other than reserves) and employee stock options 50865 77053 -26187 42703 107351 -64648 3.4 Other investment 686496 562423 124073 920223 855837 64386 3.4.1 Other equity (ADRs/GDRs) 0 0 0 0 0 0 3.4.2 Currency and deposits 224139 171683 52457 227792 205167 22625 3.4.2.1 Central bank (Rupee Debt Movements; NRG) 7926 0 7926 0 1899 -1899 3.4.2.2 Deposit-taking corporations, except the central bank (NRI Deposits) 216214 171683 44531 227792 203268 24524 3.4.2.3 General government 0 0 0 0 0 0 3.4.2.4 Other sectors 0 0 0 0 0 0 3.4.3 Loans (External Assistance, ECBs and Banking Capital) 269294 233863 35431 431378 445598 -14220 3.4.3.A Loans to India 240986 197839 43147 230804 248960 -18156 3.4.3.B Loans by India 28307 36024 -7717 200574 196638 3936 3.4.4 Insurance, pension, and standardized guarantee schemes 448 704 -257 484 5456 -4972 3.4.5 Trade credit and advances 108592 106817 1775 117484 155634 -38150 3.4.6 Other accounts receivable/payable - other 84023 49357 34667 143085 43982 99102 3.4.7 Special drawing rights 0 0 0 0 0 0 3.5 Reserve assets 0 255339 -255339 0 76155 -76155 3.5.1 Monetary gold 0 0 0 0 0 0 3.5.2 Special drawing rights n.a. 0 0 0 0 0 0 3.5.3 Reserve position in the IMF n.a. 0 0 0 0 0 0 3.5.4 Other reserve assets (Foreign Currency Assets) 0 255339 -255339 0 76155 -76155 4 Total assets/liabilities 2057963 2101748 -43785 2214747 2338757 -124010 4.1 Equity and investment fund shares 1215731 1205783 9948 1078457 1251149 -172693 4.2 Debt instruments 758209 591269 166940 993206 967470 25736 4.3 Other financial assets and liabilities 84023 304696 -220673 143085 120138 22947 5 Net errors and omissions 5343 0 5343 7905 0 7905 Note: P: Preliminary. RBI Bulletin August 2025 159CURRENT STATISTICS No. 42: India’s International Investment Position (US$ Million) Item As on Financial Year/Quarter End 2024-25 2024 2025 Mar. Dec. Mar. Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities 1 2 3 4 5 6 7 8 1. Direct investment Abroad/in India 270441 556812 242271 542952 260755 547104 270441 556812 1.1 Equity Capital* 173559 521931 153343 511142 166493 512997 173559 521931 1.2 Other Capital 96882 34881 88927 31810 94262 34107 96882 34881 2. Portfolio investment 13763 272061 12469 277239 12173 276521 13763 272061 2.1 Equity 8727 141938 10942 162061 9356 155573 8727 141938 2.2 Debt 5036 130123 1527 115178 2817 120948 5036 130123 3. Other investment 186700 640384 132617 574786 170526 619693 186700 640384 3.1 Trade credit 33422 131203 33413 123722 33213 135606 33422 131203 3.2 Loan 25891 250551 17547 221396 22523 240588 25891 250551 3.3 Currency and Deposits 79332 167598 53519 154787 68630 165713 79332 167598 3.4 Other Assets/Liabilities 48055 91032 28138 74880 46160 77785 48055 91032 4. Reserves 668326 646419 635701 668326 5. Total Assets/ Liabilities 1139230 1469257 1033776 1394977 1079156 1443318 1139230 1469257 6. Net IIP (Assets - Liabilities) -330027 -361201 -364162 -330027 Note: * Equity capital includes share of investment funds and reinvested earnings. 160 RBI Bulletin August 2025CURRENT STATISTICS Payment and Settlement Systems No. 43: Payment System Indicators PART I - Payment System Indicators - Payment & Settlement System Statistics System Volume (Lakh) Value (₹ Crore) FY 2024-25 2024 2025 FY 2024-25 2024 2025 Jun. May Jun. Jun. May Jun. 1 2 3 4 5 6 7 8 A. Settlement Systems Financial Market Infrastructures (FMIs) 1 CCIL Operated Systems (1.1 to 1.3) 47.40 4.36 5.48 5.30 296218030 22580094 29656042 30959727 1.1 Govt. Securities Clearing (1.1.1 to 1.1.3) 17.87 1.60 1.94 1.77 185733719 15107943 17500816 17946468 1.1.1 Outright 10.56 0.97 1.28 1.05 16056018 1372786 1875057 1611829 1.1.2 Repo 4.72 0.42 0.45 0.51 77286611 6414226 7645792 7894091 1.1.3 Tri-party Repo 2.58 0.21 0.21 0.21 92391091 7320931 7979967 8440549 1.2 Forex Clearing 28.06 2.67 3.44 3.39 100639565 6953169 11363617 11968143 1.3 Rupee Derivatives @ 1.46 0.09 0.10 0.14 9844746 518982 791608 1045117 B. Payment Systems I Financial Market Infrastructures (FMIs) - - - - - - - - 1 Credit Transfers - RTGS (1.1 to 1.2) 3024.55 231.84 274.71 254.88 201387682 16037694 17013770 19012360 1.1 Customer Transactions 3010.32 230.72 273.46 253.73 181153129 14570686 15219873 16983278 1.2 Interbank Transactions 14.23 1.12 1.25 1.15 20234553 1467008 1793897 2029082 II Retail 2 Credit Transfers - Retail (2.1 to 2.6) 2061014.91 155567.02 203656.72 200519.84 79781976 6073917 7146649 6957478 2.1 AePS (Fund Transfers) @ 3.64 0.30 0.31 0.30 190 16 17 16 2.2 APBS $ 32964.43 2929.34 2786.17 2841.94 554034 43676 50985 48247 2.3 IMPS 56249.68 5167.51 4636.60 4481.05 7139110 577794 640867 606356 2.4 NACH Cr $ 16938.86 1311.11 1243.57 1325.97 1670223 113888 147380 134188 2.5 NEFT 96198.05 7307.34 8215.47 7920.52 44361464 3331461 3793103 3764742 2.6 UPI @ 1858660.25 138851.42 186774.60 183950.06 26056955 2007081 2514297 2403931 2.6.1 of which USSD @ 17.24 1.41 1.79 1.18 185 15 33 21 3 Debit Transfers and Direct Debits (3.1 to 3.3) 21659.95 1697.73 1895.74 1891.36 2208583 171469 206368 210754 3.1 BHIM Aadhaar Pay @ 230.08 21.07 19.51 18.27 6907 581 641 615 3.2 NACH Dr $ 19762.28 1544.59 1723.65 1728.39 2199327 170756 205535 209956 3.3 NETC (linked to bank account) @ 1667.59 132.07 152.58 144.70 2349 132 192 183 4 Card Payments (4.1 to 4.2) 63861.15 5003.43 5827.40 5672.82 2605110 200081 226810 218552 4.1 Credit Cards (4.1.1 to 4.1.2) 47740.76 3579.49 4676.93 4587.10 2109197 158822 189832 183088 4.1.1 PoS based $ 24571.10 1895.40 2359.14 2338.70 795022 59417 69607 67468 4.1.2 Others $ 23169.66 1684.10 2317.79 2248.41 1314175 99405 120224 115620 4.2 Debit Cards (4.2.1 to 4.2.1 ) 16120.39 1423.94 1150.47 1085.72 495914 41259 36978 35463 4.2.1 PoS based $ 11980.33 1063.58 861.57 812.90 332556 27629 24735 23079 4.2.2 Others $ 4140.06 360.36 288.90 272.82 163358 13629 12243 12384 5 Prepaid Payment Instruments (5.1 to 5.2) 70254.08 5236.08 7106.39 6868.39 216751 15897 20722 20740 5.1 Wallets 52898.40 4038.05 5474.25 5338.82 154066 11298 16668 17308 5.2 Cards (5.2.1 to 5.2.2) 17355.68 1198.03 1632.13 1529.57 62686 4599 4053 3432 5.2.1 PoS based $ 8240.14 650.89 650.54 595.05 11512 946 981 888 5.2.2 Others $ 9115.54 547.14 981.59 934.51 51174 3653 3072 2544 6 Paper-based Instruments (6.1 to 6.2) 6095.38 484.42 481.93 447.43 7113350 553834 596239 550176 6.1 CTS (NPCI Managed) 6095.38 484.42 481.93 447.43 7113350 553834 596239 550176 6.2 Others 0.00 – – – – – – – Total - Retail Payments (2+3+4+5+6) 2222885.46 167988.69 218968.18 215399.84 91925771 7015198 8196787 7957700 Total Payments (1+2+3+4+5+6) 2225910.01 168220.52 219242.89 215654.72 293313453 23052892 25210557 26970060 Total Digital Payments (1+2+3+4+5) 2219814.63 167736.10 218760.96 215207.29 286200103 22499058 24614318 26419884 RBI Bulletin August 2025 161CURRENT STATISTICS PART II - Payment Modes and Channels System Volume (Lakh) Value (₹ Crore) FY 2024-25 2024 2025 FY 2024-25 2024 2025 Jun. May. Jun. Jun. May. Jun. 1 2 3 4 5 6 7 8 A. Other Payment Channels 1 Mobile Payments (mobile app based) (1.1 to 1.2) 1756976.91 132846.07 173238.90 170054.63 39206221 3029193 3641750 3385251 1.1 Intra-bank $ 110801.96 8784.73 9743.77 8974.93 7207439 557266 638772 529331 1.2 Inter-bank $ 1646174.95 124061.34 163495.14 161079.71 31998782 2471927 3002978 2855919 2 Internet Payments (Netbanking / Internet Browser Based) @ (2.1 to 2.2) 47478.09 3780.42 3668.66 3635.82 131858133 10487118 11661241 12824960 2.1 Intra-bank @ 13056.37 1029.33 851.54 839.90 69086996 5573973 6068349 6918867 2.2 Inter-bank @ 34421.72 2751.09 2817.12 2795.92 62771136 4913144 5592892 5906093 B. ATMs 3 Cash Withdrawal at ATMs $ (3.1 to 3.3) 60308.11 5076.57 4604.61 4382.08 3063077 255229 246201 229907 3.1 Using Credit Cards $ 97.25 8.29 6.70 6.28 5084 426 370 345 3.2 Using Debit Cards $ 59965.70 5045.81 4579.88 4358.58 3046987 253844 244945 228735 3.3 Using Pre-paid Cards $ 245.16 22.47 18.03 17.22 11005 959 886 827 4 Cash Withdrawal at PoS $ (4.1 to 4.2) 3.58 0.28 0.15 0.14 37 3 2 1 4.1 Using Debit Cards $ 3.33 0.27 0.13 0.11 35 3 1 1 4.2 Using Pre-paid Cards $ 0.25 0.02 0.03 0.02 3 0 0 0 5 Cash Withrawal at Micro ATMs @ 11640.55 973.79 1017.25 944.62 296622 24426 27668 25646 5.1 AePS @ 11640.55 973.79 1017.25 944.62 296622 24426 27668 25646 PART III - Payment Infrastructures (Lakh) System As on Mar. 2024 2025 2025 Jun. May. Jun. 1 2 3 4 Payment System Infrastructures 1 Number of Cards (1.1 to 1.2) 11006.97 10662.37 11115.67 11163.78 1.1 Credit Cards 1098.85 1038.13 1111.98 1111.97 1.2 Debit Cards 9908.12 9624.24 10003.70 10051.80 2 Number of PPIs @ (2.1 to 2.2) 13396.53 15051.30 13513.51 13520.65 2.1 Wallets @ 8673.62 11375.61 8692.12 8681.92 2.2 Cards @ 4722.91 3675.69 4821.38 4838.73 3 Number of ATMs (3.1 to 3.2) 2.56 2.56 2.57 2.51 3.1 Bank owned ATMs $ 2.20 2.21 2.21 2.15 3.2 White Label ATMs $ 0.36 0.35 0.36 0.36 4 Number of Micro ATMs @ 14.82 15.25 14.78 14.59 5 Number of PoS Terminals 110.98 89.67 115.89 117.91 6 Bharat QR @ 67.18 61.64 66.64 67.21 7 UPI QR * 6579.30 5770.15 6698.20 6782.51 @: New inclusion w.e.f. November 2019 #: Data reported by Co-operative Banks, LABs and RRBs included with effect from December 2021. $ : Inclusion separately initiated from November 2019 - would have been part of other items hitherto. *: New inclusion w.e.f. September 2020; Includes only static UPI QR Code Notes : 1. Data is provisional. 2. ECS (Debit and Credit) has been merged with NACH with effect from January 31, 2020. 3. The data from November 2019 onwards for card payments (Debit/Credit cards) and Prepaid Payment Instruments (PPIs) may not be comparable with earlier months/ periods, as more granular data is being published along with revision in data definitions. 4. Only domestic financial transactions are considered. The new format captures e-commerce transactions; transactions using FASTags, digital bill payments and card-to-card transfer through ATMs, etc.. Also, failed transactions, chargebacks, reversals, expired cards/ wallets, are excluded. Part I-A. Settlement systems 1.1.3: Tri- party Repo under the securities segment has been operationalised from November 05, 2018. Part I-B. Payments systems 4.1.2: ‘Others’ includes e-commerce transactions and digital bill payments through ATMs, etc. 4.2.2: ‘Others’ includes e-commerce transactions, card to card transfers and digital bill payments through ATMs, etc. 5: Available from December 2010. 5.1: includes purchase of goods and services and fund transfer through wallets. 5.2.2: includes usage of PPI Cards for online transactions and other transactions. 6.1: Pertain to three grids – Mumbai, New Delhi and Chennai. 6.2: ‘Others’ comprises of Non-MICR transactions which pertains to clearing houses managed by 21 banks. Part II-A. Other payment channels 1: Mobile Payments – o Include transactions done through mobile apps of banks and UPI apps. o The data from July 2017 includes only individual payments and corporate payments initiated, processed, and authorised using mobile device. Other corporate payments which are not initiated, processed, and authorised using mobile device are excluded. 2: Internet Payments – includes only e-commerce transactions through ‘netbanking’ and any financial transaction using internet banking website of the bank. Part II-B. ATMs 3.3 and 4.2: only relates to transactions using bank issued PPIs. Part III. Payment systems infrastructure 3: Includes ATMs deployed by Scheduled Commercial Banks (SCBs) and White Label ATM Operators (WLAOs). WLAs are included from April 2014 onwards. 162 RBI Bulletin August 2025CURRENT STATISTICS Occasional Series No. 44: Small Savings (₹ Crore) Scheme 2023-24 2024 2025 Feb. Dec. Jan. Feb. 1 2 3 4 5 1 Small Savings Receipts 232460 14570 11133 12581 11379 Outstanding 1865029 1819758 1982465 1994553 2005585 1.1 Total Deposits Receipts 161344 10025 8734 9178 8077 Outstanding 1298795 1268920 1395484 1404661 1412738 1.1.1 Post Office Saving Bank Deposits Receipts 17229 1520 1090 2702 814 Outstanding 191692 218498 201999 204701 205515 1.1.2 Sukanya Samriddhi Yojna Receipts 35174 2233 2244 2347 2282 Outstanding 157611 109222 177007 179354 181636 1.1.3 National Saving Scheme, 1987 Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.1.4 National Saving Scheme, 1992 Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.1.5 Monthly Income Scheme Receipts 26696 1927 827 1279 1045 Outstanding 269007 267205 282142 283421 284466 1.1.6 Senior Citizen Scheme 2004 Receipts 38167 2153 1531 1922 1952 Outstanding 175472 173476 194605 196527 198479 1.1.7 Post Office Time Deposits Receipts 25341 2632 2125 2853 2108 Outstanding 305776 303000 330912 333764 335872 1.1.7.1 1 year Time Deposits Outstanding 140423 138552 159174 161578 163358 1.1.7.2 2 year Time Deposits Outstanding 11967 11730 14299 14476 14637 1.1.7.3 3 year Time Deposits Outstanding 8932 8782 10308 10487 10645 1.1.7.4 5 year Time Deposits Outstanding 144454 143936 147131 147223 147232 1.1.8 Post Office Recurring Deposits Receipts 18713 -420 1025 -1831 -25 Outstanding 197134 195727 207269 205438 205413 1.1.9 Post Office Cumulative Time Deposits Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.1.10 Other Deposits Receipts 8 -20 -108 -95 -100 Outstanding 1754 1444 1195 1100 1000 1.1.11 PM Care for children Receipts 16 0 0 1 1 Outstanding 349 348 355 356 357 1.2 Saving Certificates Receipts 56069 3940 2226 3019 2858 Outstanding 418021 414597 438074 440601 443112 1.2.1 National Savings Certificate VIII issue Receipts 16853 1446 430 796 762 Outstanding 183905 180181 192621 193417 194179 1.2.2 Indira Vikas Patras Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.2.3 Kisan Vikas Patras Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.2.4 Kisan Vikas Patras - 2014 Receipts 20939 1428 1113 1376 1247 Outstanding 220560 219498 228707 230083 231330 1.2.5 National Saving Certificate VI issue Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.2.6 National Saving Certificate VII issue Receipts 0 0 0 0 0 Outstanding 0 0 0 0 0 1.2.7 M.S. Certificates Receipts 18277 1066 683 847 849 Outstanding 18277 17235 25303 26150 26999 1.2.8 Other Certificates Outstanding -4721 -2317 -8557 -9049 -9396 1.3 Public Provident Fund Receipts 15047 605 173 384 444 Outstanding 148213 136241 148907 149291 149735 Note : Data on receipts from April 2017 are net receipts, i.e., gross receipt minus gross payment. Source: Accountant General, Post and Telegraphs. RBI Bulletin August 2025 163CURRENT STATISTICS No. 45 : Ownership Pattern of Central and State Governments Securities (Per cent) Central Government Dated Securities 2024 2025 Category Mar. Jun. Sep. Dec. Mar. 1 2 3 4 5 (A) Total (in ₹ Crore) 10740389 10946860 11271589 11422728 11642652 1 Commercial Banks 37.66 37.52 37.55 37.98 36.18 2 Co-operative Banks 1.47 1.42 1.35 1.36 1.29 3 Non-Bank PDs 0.66 0.70 0.77 0.65 0.76 4 Insurance Companies 25.98 26.11 25.95 26.14 25.81 5 Mutual Funds 2.90 2.87 3.14 3.11 2.68 6 Provident Funds 4.47 4.41 4.25 4.25 4.24 7 Pension Funds 4.52 4.74 4.86 5.05 4.91 8 Financial Institutions 0.55 0.57 0.63 0.64 0.71 9 Corporates 1.35 1.44 1.60 1.45 1.49 10 Foreign Portfolio Investors 2.34 2.34 2.80 2.81 3.12 11 RBI 12.31 11.92 11.16 10.55 12.78 12 Others 5.79 5.97 5.92 6.01 6.01 12.1 State Governments 2.04 2.13 2.19 2.21 2.25 State Governments Securities 2024 2025 Category Mar. Jun. Sep. Dec. Mar. 1 2 3 4 5 (B) Total (in ₹ Crore) 5646219 5727482 5909490 6055711 6399564 1 Commercial Banks 34.14 33.85 34.39 35.11 35.40 2 Co-operative Banks 3.39 3.38 3.29 3.22 3.08 3 Non-Bank PDs 0.60 0.59 0.60 0.53 0.61 4 Insurance Companies 26.14 25.85 25.56 25.16 24.07 5 Mutual Funds 2.09 2.08 1.93 1.89 1.93 6 Provident Funds 22.35 22.94 23.02 22.90 23.60 7 Pension Funds 4.76 4.87 4.87 4.82 5.07 8 Financial Institutions 1.59 1.58 1.57 1.58 1.48 9 Corporates 2.02 2.03 1.95 1.97 2.05 10 Foreign Portfolio Investors 0.07 0.05 0.04 0.03 0.05 11 RBI 0.63 0.62 0.60 0.58 0.55 12 Others 2.20 2.17 2.18 2.19 2.10 12.1 State Governments 0.25 0.26 0.26 0.26 0.25 Treasury Bills 2024 2025 Category Mar. Jun. Sep. Dec. Mar. 1 2 3 4 5 (C) Total (in ₹ Crore) 871662 858193 747242 760045 790381 1 Commercial Banks 58.53 47.79 44.74 40.45 46.58 2 Co-operative Banks 1.67 1.49 1.58 1.22 2.17 3 Non-Bank PDs 1.66 2.69 2.28 1.41 2.09 4 Insurance Companies 5.06 5.78 5.26 4.73 4.23 5 Mutual Funds 11.89 14.50 15.06 15.41 16.15 6 Provident Funds 0.15 0.60 0.26 0.04 0.20 7 Pension Funds 0.01 0.00 0.00 0.00 0.02 8 Financial Institutions 7.16 6.56 6.36 6.77 7.73 9 Corporates 4.50 4.79 4.66 4.56 4.50 10 Foreign Portfolio Investors 0.01 0.20 0.15 0.12 0.09 11 RBI 0.00 0.00 0.00 0.00 0.00 12 Others 9.36 15.59 19.65 25.29 16.23 12.1 State Governments 5.88 11.55 14.95 20.11 11.23 Notes: (1) The table format is revised since monthly Bulletin for the month of June 2023. (2) Central Government Dated Securities include special securities and Sovereign Gold Bonds. (3) State Government Securities include special bonds issued under Ujwal DISCOM Assurance Yojana (UDAY). (4) Bank PDs are clubbed under Commercial Banks. (5) The category ‘Others’ comprises State Governments, DICGC, PSUs, Trusts, Foreign Central Banks, HUF/ Individuals etc. (6) Data since September 2023 includes the impact of the merger of a non-bank with a bank. 164 RBI Bulletin August 2025CURRENT STATISTICS No. 46: Combined Receipts and Disbursements of the Central and State Governments (₹ Crore) Item 2019-20 2020-21 2021-22 2022-23 2023-24 RE 2024-25 BE 1 2 3 4 5 6 1 Total Disbursements 5410887 6353359 7098451 7880522 9110725 9800798 1.1 Developmental 3074492 3823423 4189146 4701611 5514584 5862996 1.1.1 Revenue 2446605 3150221 3255207 3574503 3965270 4195108 1.1.2 Capital 588233 550358 861777 1042159 1453849 1526993 1.1.3 Loans 39654 122844 72163 84949 95464 140895 1.2 Non-Developmental 2253027 2442941 2810388 3069896 3467270 3800321 1.2.1 Revenue 2109629 2271637 2602750 2895864 3266628 3537378 1.2.1.1 Interest Payments 955801 1060602 1226672 1377807 1562660 1711972 1.2.2 Capital 141457 169155 175519 171131 196073 259346 1.2.3 Loans 1941 2148 32119 2902 4569 3597 1.3 Others 83368 86995 98916 109015 128871 137481 2 Total Receipts 5734166 6397162 7156342 7855370 9054999 9650488 2.1 Revenue Receipts 3851563 3688030 4823821 5447913 6379349 7209647 2.1.1 Tax Receipts 3231582 3193390 4160414 4809044 5456913 6142276 2.1.1.1 Taxes on commodities and services 2012578 2076013 2626553 2865550 3248450 3631569 2.1.1.2 Taxes on Income and Property 1216203 1114805 1530636 1939550 2204462 2506181 2.1.1.3 Taxes of Union Territories (Without Legislature) 2800 2572 3225 3943 4001 4526 2.1.2 Non-Tax Receipts 619981 494640 663407 638870 922436 1067371 2.1.2.1 Interest Receipts 31137 33448 35250 42975 49552 57273 2.2 Non-debt Capital Receipts 110094 64994 44077 62716 86733 118239 2.2.1 Recovery of Loans & Advances 59515 16951 27665 15970 55895 45125 2.2.2 Disinvestment proceeds 50578 48044 16412 46746 30839 73114 3 Gross Fiscal Deficit [ 1 - ( 2.1 + 2.2 ) ] 1449230 2600335 2230553 2369892 2644642 2472912 3A Sources of Financing: Institution-wise 3A.1 Domestic Financing 1440548 2530155 2194406 2332768 2619811 2456959 3A.1.1 Net Bank Credit to Government 571872 890012 627255 687904 346483 ... 3A.1.1.1 Net RBI Credit to Government 190241 107493 350911 529 -257913 ... 3A.1.2 Non-Bank Credit to Government 868676 1640143 1567151 1644864 2273328 ... 3A.2 External Financing 8682 70180 36147 37124 24832 15952 3B Sources of Financing: Instrument-wise 3B.1 Domestic Financing 1440548 2530155 2194406 2332768 2619811 2456959 3B.1.1 Market Borrowings (net) 971378 1696012 1213169 1651076 1962969 1983757 3B.1.2 Small Savings (net) 209232 458801 526693 358764 434151 447511 3B.1.3 State Provident Funds (net) 38280 41273 28100 13880 21386 19857 3B.1.4 Reserve Funds 10411 4545 42153 68803 52385 -33653 3B.1.5 Deposits and Advances -14227 25682 42203 51989 35819 -10138 3B.1.6 Cash Balances -323279 -43802 -57891 25152 55726 150310 3B.1.7 Others 548753 347643 399980 163104 57374 -100684 3B.2 External Financing 8682 70180 36147 37124 24832 15952 4 Total Disbursements as per cent of GDP 26.9 32.0 30.1 29.2 30.8 30.0 5 Total Receipts as per cent of GDP 28.5 32.2 30.3 29.1 30.7 29.6 6 Revenue Receipts as per cent of GDP 19.2 18.6 20.4 20.2 21.6 22.1 7 Tax Receipts as per cent of GDP 16.1 16.1 17.6 17.8 18.5 18.8 8 Gross Fiscal Deficit as per cent of GDP 7.2 13.1 9.5 8.8 9.0 7.6 … : Not available; RE: Revised Estimates; BE: Budget Estimates Source : Budget Documents of Central and State Governments. Notes: GDP data is based on 2011-12 base. GDP for 2024-25 is from Union Budget 2024-25. Data pertains to all States and Union Territories. 1 & 2: Data are net of repayments of the Central Government (including repayments to the NSSF) and State Governments. 1.3: Represents compensation and assignments by States to local bodies and Panchayati Raj institutions. 2: Data are net of variation in cash balances of the Central and State Governments and includes borrowing receipts of the Central and State Governments. 3A.1.1: Data as per RBI records. 3B.1.1: Borrowings through dated securities. 3B.1.2: Represent net investment in Central and State Governments’ special securities by the National Small Savings Fund (NSSF). This data may vary from previous publications due to adjustments across components with availability of new data. 3B.1.6: Include Ways and Means Advances by the Centre to the State Governments. 3B.1.7: Include Treasury Bills, loans from financial institutions, insurance and pension funds, remittances, cash balance investment account. RBI Bulletin August 2025 165CURRENT STATISTICS No. 47: Financial Accommodation Availed by State Governments under various Facilities (₹ Crore) During June-2025 Sr. State/Union Territory Special Drawing Ways and Means Overdraft (OD) No Facility (SDF) Advances (WMA) Average Number Average Number Average Number amount of days amount of days amount of days availed availed availed availed availed availed 1 2 3 4 5 6 7 1 Andhra Pradesh 5259.07 28 1662.97 8 3117.88 3 2 Arunachal Pradesh - - - - - - 3 Assam - - - - - - 4 Bihar - - - - - - 5 Chhattisgarh - - - - - - 6 Goa - - - - - - 7 Gujarat - - - - - - 8 Haryana - - - - - - 9 Himachal Pradesh - - 422.98 29 257.53 4 10 Jammu & Kashmir UT 18.86 21 478.83 21 - - 11 Jharkhand - - - - - - 12 Karnataka - - - - - - 13 Kerala 1370.57 30 807.70 16 - - 14 Madhya Pradesh - - - - - - 15 Maharashtra 3027.77 17 - - - - 16 Manipur 69.73 16 163.71 9 - - 17 Meghalaya 303.85 14 82.50 1 - - 18 Mizoram - - - - - - 19 Nagaland 217.51 11 - - - - 20 Odisha - - - - - - 21 Puducherry - - - - - - 22 Punjab 3330.73 23 376.59 1 - - 23 Rajasthan 2682.97 21 409.27 3 - - 24 Tamil Nadu - - - - - - 25 Telangana 4568.60 30 1386.67 21 738.44 5 26 Tripura - - - - - - 27 Uttar Pradesh - - - - - - 28 Uttarakhand 721.61 30 - - - - 29 West Bengal - - - - - - Notes: 1. SDF is availed by State Governments against the collateral of Consolidated Sinking Fund (CSF), Guarantee Redemption Fund (GRF) & Auction Treasury Bills (ATBs) balances and other investments in government securities. 2. WMA is advance by Reserve Bank of India to State Governments for meeting temporary cash mismatches. 3. OD is advanced to State Governments beyond their WMA limits. 4. Average amount availed is the total accommodation (SDF/WMA/OD) availed divided by number of days for which accommodation was extended during the month. 5. - : Nil. Source: Reserve Bank of India. 166 RBI Bulletin August 2025CURRENT STATISTICS No. 48: Investments by State Governments (₹ Crore) As on end of June 2025 Consolidated Guarantee Sr. State/Union Government Auction Treasury Sinking Fund Redemption Fund No Territory Securities Bills (ATBs) (CSF) (GRF) 1 2 3 4 5 1 Andhra Pradesh 11908 1173 0 0 2 Arunachal Pradesh 3032 8 0 3400 3 Assam 7618 93 0 0 4 Bihar 12846 - 0 11500 5 Chhattisgarh 8466 986 0 7130 6 Goa 1157 471 0 0 7 Gujarat 15780 686 0 2500 8 Haryana 2689 1749 0 0 9 Himachal Pradesh - - 0 0 10 Jammu & Kashmir UT 37 36 0 0 11 Jharkhand 3085 - 0 780 12 Karnataka 20831 773 0 70564 13 Kerala 3329 - 0 0 14 Madhya Pradesh - 1315 0 1500 15 Maharashtra 73492 2215 0 0 16 Manipur 71 144 0 0 17 Meghalaya 1312 112 0 0 18 Mizoram 520 82 0 0 19 Nagaland 1948 47 0 0 20 Odisha 18859 2104 0 12236 21 Puducherry 596 - 0 1950 22 Punjab 10372 948 0 0 23 Rajasthan 2408 375 0 5750 24 Tamil Nadu 3562 - 0 1450 25 Telangana 8130 1779 0 0 26 Tripura 1356 31 0 0 27 Uttarakhand 5460 266 0 0 28 Uttar Pradesh 15085 2247 0 15000 29 West Bengal 14241 1064 0 10000 Total 248188 18704 0 143759 Notes: 1. CSF and GRF are reserve funds maintained by some State Governments with the Reserve Bank of India. 2. ATBs include investment by State Governments in Treasury bills of 91 days, 182 days and 364 days in the primary market. 3. - : Not Applicable (not a member of the scheme). RBI Bulletin August 2025 167CURRENT STATISTICS No. 49: Market Borrowings of State Governments (₹ Crore) 2025-26 Total amount 2023-24 2024-25 raised, so far in April May June 2025-26 Sr. No. State Gross Net Gross Net Gross Net Gross Net Gross Net Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount Gross Net Raised Raised Raised Raised Raised Raised Raised Raised Raised Raised 1 2 3 4 5 6 7 8 9 10 11 12 13 1 Andhra Pradesh 68400 55330 78205 57123 5750 4750 6822 4322 14000 13000 26572 22072 2 Arunachal Pradesh 902 672 1010 704 - -130 - - - - - -130 3 Assam 18500 16000 19000 13850 900 -50 2600 2600 - - 3500 2550 4 Bihar 47612 29910 47546 30890 - - - - - - - - 5 Chhattisgarh 32000 26213 24500 16913 1970 1970 1000 1000 1000 1000 3970 3970 6 Goa 2550 1560 1050 250 - -150 100 -50 100 100 200 -100 7 Gujarat 30500 11947 38200 16280 - -2560 8500 4500 1500 300 10000 2240 8 Haryana 47500 28364 49500 31710 2000 2000 5000 3100 3000 425 10000 5525 9 Himachal Pradesh 8072 5856 7359 4725 2200 1550 - - 800 800 3000 2350 10 Jammu & Kashmir UT 16337 13904 13170 11416 1000 1000 800 300 705 705 2505 2005 11 Jharkhand 1000 -2505 3500 -2005 - - - - - - - - 12 Karnataka 81000 63003 92025 71525 - - - - - -1000 - -1000 13 Kerala 42438 26638 53666 37966 2000 - 5000 3500 5000 4000 12000 7500 14 Madhya Pradesh 38500 26264 63400 47206 - - 5000 5000 3277 2277 8277 7277 15 Maharashtra 110000 79738 123000 90917 13500 13500 - -3500 8000 6500 21500 16500 16 Manipur 1426 1076 1500 1037 - -200 750 750 - - 750 550 17 Meghalaya 1364 912 1882 997 350 250 - - 500 430 850 680 18 Mizoram 901 641 1169 939 - - - - 125 50 125 50 19 Nagaland 2551 2016 1550 950 - - - -100 - -100 - -200 20 Odisha 0 -4658 20780 17780 - - - - - - - - 21 Puducherry 1100 475 1600 880 - - - - 200 200 200 200 22 Punjab 42386 29517 40828 32466 5800 4200 5500 4600 4500 2858 15800 11658 23 Rajasthan 73624 49718 75185 49479 5500 3500 8600 6600 9500 4938 23600 15038 24 Sikkim 1916 1701 1951 1621 - - - - - - - - 25 Tamil Nadu 113001 75970 123625 89894 4000 1000 7300 1300 13000 9750 24300 12050 26 Telangana 49618 39385 56209 42199 4400 3400 4500 1152 8500 7200 17400 11752 27 Tripura 0 -550 0 -150 500 500 300 300 - - 800 800 28 Uttar Pradesh 97650 85335 45000 23185 3000 -1000 3000 1000 - -3233 6000 -3233 29 Uttarakhand 6300 3800 10400 8000 1000 1000 - - 1000 250 2000 1250 30 West Bengal 69910 48910 76500 54600 - -1000 - -1500 7500 6000 7500 3500 Grand Total 1007058 717140 1073310 753345 53870 33530 64772 34874 82207 56449 200849 124853 - : Nil. Note: The State of J&K has ceased to exist constitutionally from October 31, 2019 and the liabilities of the State continue to remain as liabilities of the new UT of Jammu and Kashmir. Source: Reserve Bank of India. 168 RBI Bulletin August 2025CURRENT STATISTICS No. 50 (a): Flow of Financial Assets and Liabilities of Households - Instrument-wise (Amount in ` Crore) 2022-23 Item Q1 Q2 Q3 Q4 Annual Net Financial Assets (I-II) 287802.7 297217.6 293954.9 451660.3 1330635.4 Per cent of GDP 4.4 4.6 4.3 6.4 4.9 I. Financial Assets 577822.4 632335.6 748109.7 968986.1 2927253.7 Per cent of GDP 8.9 9.8 11.0 13.6 10.9 of which: 1.Total Deposits (a+b) 185429.1 317361.2 280233.1 325852.7 1108876.2 (a) Bank Deposits 163172.4 299532.7 256399.7 307866.8 1026971.5 i. Commercial Banks 158613.3 300565.0 248459.8 284968.0 992606.2 ii. Co-operative Banks 4559.0 -1032.4 7939.8 22898.9 34365.3 (b) Non-Bank Deposits 22256.8 17828.6 23833.5 17985.9 81904.7 of which: Other Financial Institutions (i+ii) 6504.8 2076.7 8081.6 2234.0 18897.1 i. Non-Banking Financial Companies 4230.6 3267.2 3246.9 3945.8 14690.4 ii. Housing Finance Companies 2274.2 -1190.5 4834.7 -1711.8 4206.6 2. Life Insurance Funds 73357.5 151737.1 167581.7 156268.5 548944.9 3. Provident and Pension Funds (including PPF) 146719.1 118171.9 136388.4 216513.6 617793.1 4. Currency 66438.9 -54579.3 76760.1 148990.1 237609.7 5. Investments 51502.6 48530.1 49778.6 64150.6 213961.9 of which: (a) Mutual Funds 35443.5 44484.0 40205.9 58954.5 179087.8 (b) Equity 13560.9 1378.2 6434.1 1664.9 23038.1 6. Small Savings (excluding PPF) 54375.1 51114.5 37367.7 57210.6 200068.0 II. Financial Liabilities 290019.7 335118.0 454154.8 517325.8 1596618.3 Per cent of GDP 4.5 5.2 6.7 7.3 5.9 Loans/Borrowings 1. Financial Corporations (a+b) 289781.5 334879.7 453916.6 517087.5 1595665.3 (a) Banking Sector 234235.0 263450.2 370782.9 383843.2 1252311.4 of which: i. Commercial Banks 230283.8 261265.3 368304.6 331291.0 1191144.8 (b) Other Financial Institutions 55546.4 71429.5 83133.7 133244.3 343353.9 i. Non-Banking Financial Companies 30531.7 36650.3 55791.7 94565.3 217539.1 ii. Housing Finance Companies 22336.7 33031.2 24903.3 36745.8 117017.0 iii. Insurance Corporations 2678.0 1747.9 2438.7 1933.2 8797.8 2. Non-Financial Corporations (Private Corporate Business) 33.7 33.7 33.7 33.7 135.0 3. General Government 204.5 204.5 204.5 204.5 818.0 RBI Bulletin August 2025 169CURRENT STATISTICS No. 50 (a): Flow of Financial Assets and Liabilities of Households - Instrument-wise (Contd.) (Amount in ` Crore) 2023-24 Item Q1 Q2 Q3 Q4 Annual Net Financial Assets (I-II) 349607.1 283994.4 294431.6 666547.4 1594580.4 Per cent of GDP 4.8 3.9 3.8 8.4 5.3 I. Financial Assets 671244.1 810128.8 805066.2 1187279.1 3473718.2 Per cent of GDP 9.3 11.2 10.4 14.9 11.5 of which: 1.Total Deposits (a+b) 266680.3 407948.0 296931.3 406706.9 1378266.4 (a) Bank Deposits 253004.1 501768.5 277432.0 390720.4 1422924.9 i. Commercial Banks 243833.9 502260.7 280096.7 383460.6 1409651.9 ii. Co-operative Banks 9170.2 -492.2 -2664.7 7259.8 13273.0 (b) Non-Bank Deposits 13676.2 -93820.5 19499.4 15986.5 -44658.5 of which: Other Financial Institutions (i+ii) -485.4 -107982.1 5337.7 1824.9 -101304.9 i. Non-Banking Financial Companies 6119.3 4782.3 4895.8 1942.9 17740.3 ii. Housing Finance Companies -6604.7 -112764.4 441.9 -118.0 -119045.2 2. Life Insurance Funds 157301.9 140356.8 160135.2 189267.6 647061.4 3. Provident and Pension Funds (including PPF) 163686.0 148356.1 153435.1 253882.9 719360.2 4. Currency -48636.2 -36700.8 56719.0 146643.8 118025.7 5. Investments 41014.3 72664.6 79238.2 108336.6 301253.8 of which: (a) Mutual Funds 32085.6 55768.8 60134.6 90973.0 238962.1 (b) Equity 3756.7 7146.3 9941.1 8236.1 29080.1 6. Small Savings (excluding PPF) 91197.8 77504.1 58607.4 82441.4 309750.7 II. Financial Liabilities 321637.1 526134.4 510634.6 520731.7 1879137.8 Per cent of GDP 4.5 7.3 6.6 6.5 6.2 Loans/Borrowings 1. Financial Corporations (a+b) 321519.8 526016.2 510516.4 520613.5 1878665.8 (a) Banking Sector 213606.3 868873.9 402647.1 392330.5 1877457.7 of which: i. Commercial Banks 208026.5 875654.0 389898.0 382557.9 1856136.4 (b) Other Financial Institutions 107913.6 -342857.7 107869.2 128283.0 1208.0 i. Non-Banking Financial Companies 81448.8 59683.7 85031.8 100836.5 327000.7 ii. Housing Finance Companies 23784.0 -404294.0 21233.4 25852.9 -333423.7 iii. Insurance Corporations 2680.7 1752.6 1604.0 1593.6 7631.0 2. Non-Financial Corporations (Private Corporate Business) 33.7 34.7 34.7 34.7 138.0 3. General Government 83.5 83.5 83.5 83.5 334.0 170 RBI Bulletin August 2025CURRENT STATISTICS No. 50 (a): Flow of Financial Assets and Liabilities of Households - Instrument-wise (Concld.) (Amount in ` Crore) 2024-25 Item Q1 Q2 Q3 Q4 Annual Net Financial Assets (I-II) 551994.2 496676.1 271043.1 674489.0 1994202.4 Per cent of GDP 7.0 6.3 3.2 7.6 6.0 I. Financial Assets 840665.3 901135.4 689663.5 1129381.1 3560845.4 Per cent of GDP 10.6 11.5 8.1 12.8 10.8 of which: 1.Total Deposits (a+b) 274567.9 403591.4 158320.8 418183.6 1254663.6 (a) Bank Deposits 254885.4 388328.6 141290.0 401577.5 1186081.4 i. Commercial Banks 251171.1 389734.0 147864.7 395337.4 1184107.2 ii. Co-operative Banks 3714.3 -1405.4 -6574.7 6240.0 1974.2 (b) Non-Bank Deposits 19682.4 15262.8 17030.8 16606.1 68582.2 of which: Other Financial Institutions (i+ii) 7461.4 3041.8 4809.8 4385.1 19698.2 i. Non-Banking Financial Companies 6289.7 3230.0 4444.5 4220.0 18184.2 ii. Housing Finance Companies 1171.7 -188.2 365.4 165.1 1514.0 2. Life Insurance Funds 175427.0 178835.2 90159.4 90393.0 534814.6 3. Provident and Pension Funds (including PPF) 170218.2 170219.6 170758.3 281332.6 792528.6 4. Currency 34212.5 -57615.2 70840.8 162236.1 209674.1 5. Investments 120638.2 152637.1 159255.2 103720.8 536251.4 of which: (a) Mutual Funds 106987.0 137618.0 124132.0 97193.0 465930.0 (b) Equity 14448.0 15645.0 36063.1 7410.3 73566.5 6. Small Savings (excluding PPF) 65601.6 53467.4 40329.0 73515.0 232913.0 II. Financial Liabilities 288671.1 404459.3 418620.4 454892.1 1566642.9 Per cent of GDP 3.7 5.2 4.9 5.2 4.7 Loans/Borrowings 1. Financial Corporations (a+b) 288492.4 404280.6 418441.7 454713.3 1565928.0 (a) Banking Sector 205040.4 322147.7 319626.6 387045.6 1233860.3 of which: i. Commercial Banks 208525.3 321241.4 302569.3 379856.5 1212192.4 (b) Other Financial Institutions 83452.0 82132.9 98815.0 67667.7 332067.7 i. Non-Banking Financial Companies 65813.7 65488.7 75764.5 39833.9 246900.8 ii. Housing Finance Companies 15125.2 14233.6 20561.4 25756.8 75677.0 iii. Insurance Corporations 2513.1 2410.7 2489.1 2077.1 9489.9 2. Non-Financial Corporations (Private Corporate Business) 34.7 34.7 34.7 34.7 139.0 3. General Government 144.0 144.0 144.0 144.0 576.0 Notes : 1. Net Financial Savings of households refer to the net financial assets, which are measured as difference of financial asset and liabilities flows. 2. Preliminary estimates for 2024-25 and revised estimates for 2022-23 and 2023-24. 3. The preliminary estimates for 2024-25 will undergo revision with the release of first revised estimates of national income, consumption expenditure, savings, and capital formation, 2024-25 by the NSO. 4. Non-bank deposits apart from other financial institutions, comprises state power utilities, co-operative non credit societies etc. 5. Figures in the columns may not add up to the total due to rounding off. RBI Bulletin August 2025 171CURRENT STATISTICS No. 50 (b): Stocks of Financial Assets and Liabilities of Households- Select Indicators (Amount in ` Crore) Item Jun-2022 Sep-2022 Dec-2022 Mar-2023 Financial Assets (a+b+c+d+e+f+g+h) 25621348.1 26423992.1 27187715.6 27844981.1 Per cent of GDP 102.8 102.6 103.3 103.5 (a) Bank Deposits (i+ii) 11843527.1 12143059.7 12399459.4 12707326.2 i. Commercial Banks 10987692.1 11288257.2 11536717.0 11821685.0 ii. Co-operative Banks 855834.9 854802.6 862742.4 885641.2 (b) Non-Bank Deposits of which: Other Financial Institutions 216170.0 218246.7 226328.2 228562.2 i. Non-Banking Financial Companies 74794.2 78061.4 81308.3 85254.0 ii. Housing Finance Companies 141375.8 140185.3 145020.0 143308.2 (c) Life Insurance Funds 5325967.3 5559681.9 5786592.6 5795430.6 (d) Currency 2950343.2 2895763.9 2972524.0 3121514.1 (e) Mutual funds 2048097.3 2260209.7 2355315.8 2367792.5 (f) Public Provident Fund (PPF) 851913.4 858591.1 864730.6 939449.0 (g) Pension Funds 744459.2 796454.0 853412.0 898343.0 (h) Small Savings (excluding PPF) 1640870.6 1691985.1 1729352.9 1786563.5 Financial Liabilities (a+b) 8911860.9 9246740.6 9700657.2 10217744.7 Per cent of GDP 35.8 35.9 36.9 38.0 Loans/Borrowings (a) Banking Sector 7095467.7 7358918.0 7729700.9 8113544.1 of which: i. Commercial Banks 6620073.1 6881338.5 7249643.0 7580934.1 ii. Co-operative Banks 473897.0 476024.8 478486.9 530915.0 (b) Other Financial Institutions 1816393.1 1887822.6 1970956.3 2104200.7 of which: i. Non-Banking Financial Companies 869174.9 905825.3 961617.0 1056182.3 ii. Housing Finance Companies 835181.3 868212.5 893115.8 929861.7 iii. Insurance Corporations 112036.9 113784.8 116223.5 118156.7 172 RBI Bulletin August 2025CURRENT STATISTICS No. 50 (b): Stocks of Financial Assets and Liabilities of Households- Select Indicators (Contd.) (Amount in ` Crore) Item Jun-2023 Sep-2023 Dec-2023 Mar-2024 Financial Assets (a+b+c+d+e+f+g+h) 28754605.9 29637615.0 30737884.8 32025210.0 Per cent of GDP 104.2 104.4 105.0 106.3 (a) Bank Deposits (i+ii) 12960330.3 13462098.8 13739530.7 14130251.1 i. Commercial Banks 12065518.9 12567779.6 12847876.2 13231336.9 ii. Co-operative Banks 894811.4 894319.2 891654.5 898914.3 (b) Non-Bank Deposits of which: Other Financial Institutions 228076.8 120094.7 125432.4 127257.3 i. Non-Banking Financial Companies 91373.3 96155.6 101051.4 102994.3 ii. Housing Finance Companies 136703.5 23939.1 24381.0 24263.0 (c) Life Insurance Funds 6064436.9 6255801.1 6553726.0 6820611.8 (d) Currency 3072877.9 3036177.0 3092896.0 3239539.8 (e) Mutual funds 2626046.1 2829859.3 3156299.3 3387208.3 (f) Public Provident Fund (PPF) 955060.6 960343.6 964851.5 1051376.5 (g) Pension Funds 970016.0 1017975.0 1091276.0 1172651.0 (h) Small Savings (excluding PPF) 1877761.2 1955265.4 2013872.8 2096314.2 Financial Liabilities (a+b) 10539264.5 11065280.7 11575797.1 12096410.5 Per cent of GDP 38.2 39.0 39.6 40.2 Loans/Borrowings (a) Banking Sector 8327150.3 9196024.2 9598671.3 9991001.8 of which: i. Commercial Banks 7788960.6 8664614.6 9054512.6 9437070.5 ii. Co-operative Banks 536409.2 529527.7 542240.6 551852.1 (b) Other Financial Institutions 2212114.2 1869256.5 1977125.7 2105408.7 of which: i. Non-Banking Financial Companies 1137631.1 1197314.8 1282346.6 1383183.0 ii. Housing Finance Companies 953645.7 549351.7 570585.1 596438.0 iii. Insurance Corporations 120837.4 122590.0 124194.0 125787.7 RBI Bulletin August 2025 173CURRENT STATISTICS No. 50 (b): Stocks of Financial Assets and Liabilities of Households- Select Indicators (Concld.) (Amount in ` Crore) Item Jun-2024 Sep-2024 Dec-2024 Mar-2025 Financial Assets (a+b+c+d+e+f+g+h) 33253098.6 34421189.5 34532805.6 35264710.9 Per cent of GDP 107.9 109.6 107.2 106.6 (a) Bank Deposits (i+ii) 14385136.5 14773465.1 14914755.1 15316332.6 i. Commercial Banks 13482508.0 13872242.0 14020106.6 14415444.1 ii. Co-operative Banks 902628.6 901223.2 894648.5 900888.5 (b) Non-Bank Deposits of which: Other Financial Institutions 134718.7 137760.5 142570.3 146955.5 i. Non-Banking Financial Companies 109284.0 112514.0 116958.5 121178.5 ii. Housing Finance Companies 25434.7 25246.5 25611.9 25777.0 (c) Life Insurance Funds 7123527.6 7385938.1 7272871.3 7293099.1 (d) Currency 3273752.3 3216137.1 3286977.8 3449213.9 (e) Mutual funds 3866386.1 4291914.4 4224091.7 4128924.5 (f) Public Provident Fund (PPF) 1059829.5 1063056.1 1064212.0 1157449.2 (g) Pension Funds 1247832.0 1337535.0 1371615.0 1443509.0 (h) Small Savings (excluding PPF) 2161915.8 2215383.2 2255712.2 2329227.2 Financial Liabilities (a+b) 12384902.9 12789183.5 13207625.1 13662338.5 Per cent of GDP 40.2 40.7 41.0 41.3 Loans/Borrowings (a) Banking Sector 10196042.2 10518189.9 10837816.5 11224862.1 of which: i. Commercial Banks 9645595.7 9966837.1 10269406.4 10649262.8 ii. Co-operative Banks 548284.4 549069.4 566104.4 573131.8 (b) Other Financial Institutions 2188860.7 2270993.6 2369808.7 2437476.4 of which: i. Non-Banking Financial Companies 1448996.8 1514485.5 1590250.0 1630083.9 ii. Housing Finance Companies 611563.2 625796.8 646358.2 672115.0 iii. Insurance Corporations 128300.7 130711.4 133200.5 135277.5 Notes : 1. Data as ratios to GDP have been calculated based on the Provisional Estimates of National Income 2024-25, released by NSO on May 30, 2025. 2. Pension funds comprises funds with the National Pension Scheme. 3. Outstanding deposits with Small Savings are sourced from the Controller General of Accounts, Government of India. 4. Non-bank deposits apart from other financial institutions, comprises state power utilities, co-operative non credit societies etc. Data for outstanding deposits are available only for other financial institutions. 5. Figures in the columns may not add up to the total due to rounding off. 174 RBI Bulletin August 2025CURRENT STATISTICS Explanatory Notes to the Current Statistics Table No. 1 1.2& 6: Annual data are average of months. 3.5 & 3.7: Relate to ratios of increments over financial year so far. 4.1 to 4.4, 4.8,4.9 &5: Relate to the last friday of the month/financial year. 4.5, 4.6 & 4.7: Relate to five major banks on the last Friday of the month/financial year. 4.10 to 4.12: Relate to the last auction day of the month/financial year. 4.13: Relate to last day of the month/ financial year 7.1&7.2: Relate to Foreign trade in US Dollar. Table No. 2 2.1.2: Include paid-up capital, reserve fund and Long-Term Operations Funds. 2.2.2: Include cash, fixed deposits and short-term securities/bonds, e.g., issued by IIFC (UK). Table No. 4 Maturity-wise position of outstanding forward contracts is available at http://nsdp.rbi.org.in under ‘‘Reserves Template’’. Table No. 5 Special refinance facility to Others, i.e. to the EXIM Bank, is closed since March 31, 2013. Table No. 6 For scheduled banks, March-end data pertain to the last reporting Friday. 2.2: Exclude balances held in IMF Account No.1, RBI employees’ provident fund, pension fund, gratuity and superannuation fund. Table Nos. 7 & 11 3.1 in Table 7 and 2.4 in Table 11: Include foreign currency denominated bonds issued by IIFC (UK). Table No. 8 NM and NM do not include FCNR (B) deposits. 2 3 2.4: Consist of paid-up capital and reserves. 2.5: includes other demand and time liabilities of the banking system. Table No. 9 Financial institutions comprise EXIM Bank, SIDBI, NABARD and NHB. L and L are compiled monthly and L quarterly. 1 2 3 Wherever data are not available, the last available data have been repeated. Table No. 13 Data against column Nos. (1), (2) & (3) are Final and for column Nos. (4) & (5) data are Provisional. RBI Bulletin August 2025 175CURRENT STATISTICS Table No. 14 Data in column Nos. (4) & (8) are Provisional. Table No. 17 2.1.1: Exclude reserve fund maintained by co-operative societies with State Co-operative Banks 2.1.2: Exclude borrowings from RBI, SBI, IDBI, NABARD, notified banks and State Governments. 4: Include borrowings from IDBI and NABARD. Table No. 24 Primary Dealers (PDs) include banks undertaking PD business. Table No. 30 Exclude private placement and offer for sale. 1: Exclude bonus shares. 2: Include cumulative convertible preference shares and equi-preference shares. Table No. 32 Exclude investment in foreign currency denominated bonds issued by IIFC (UK), SDRs transferred by Government of India to RBI and foreign currency received under SAARC and ACU currency swap arrangements. Foreign currency assets in US dollar take into account appreciation/depreciation of non-US currencies (such as Euro, Sterling, Yen and Australian Dollar) held in reserves. Foreign exchange holdings are converted into rupees at rupee-US dollar RBI holding rates. Table No. 34 1.1.1.1.2 & 1.1.1.1.1.4: Estimates. 1.1.1.2: Estimates for latest months. ‘Other capital’ pertains to debt transactions between parent and subsidiaries/branches of FDI enterprises. Data may not tally with the BoP data due to lag in reporting. Table No. 35 1.10: Include items such as subscription to journals, maintenance of investment abroad, student loan repayments and credit card payments. Table No. 36 Increase in indices indicates appreciation of rupee and vice versa. For 6-Currency index, base year 2022-23 is a moving one, which gets updated every year. REER figures are based on Consumer Price Index (combined). The details on methodology used for compilation of NEER/REER indices are available in December 2005, April 2014 and January 2021 issues of the RBI Bulletin. Table No. 37 Based on applications for ECB/Foreign Currency Convertible Bonds (FCCBs) which have been allotted loan registration number during the period. 176 RBI Bulletin August 2025CURRENT STATISTICS Table Nos. 38, 39, 40 & 41 Explanatory notes on these tables are available in December issue of RBI Bulletin, 2012. Table No. 43 Part I-A. Settlement systems 1.1.3: Tri- party Repo under the securities segment has been operationalised from November 05, 2018. Part I-B. Payments systems 4.1.2: ‘Others’ includes e-commerce transactions and digital bill payments through ATMs, etc. 4.2.2: ‘Others’ includes e-commerce transactions, card to card transfers and digital bill payments through ATMs, etc. 5: Available from December 2010. 5.1: includes purchase of goods and services and fund transfer through wallets. 5.2.2: includes usage of PPI Cards for online transactions and other transactions. 6.1: Pertain to three grids – Mumbai, New Delhi and Chennai. 6.2: ‘Others’ comprises of Non-MICR transactions which pertains to clearing houses managed by 21 banks. Part II-A. Other payment channels 1: Mobile Payments – Include transactions done through mobile apps of banks and UPI apps. o The data from July 2017 includes only individual payments and corporate payments initiated, o processed, and authorised using mobile device. Other corporate payments which are not initiated, processed, and authorised using mobile device are excluded. 2: Internet Payments – includes only e-commerce transactions through ‘netbanking’ and any financial transaction using internet banking website of the bank. Part II-B. ATMs 3.3 and 4.2: only relates to transactions using bank issued PPIs. Part III. Payment systems infrastructure 3: Includes ATMs deployed by Scheduled Commercial Banks (SCBs) and White Label ATM Operators (WLAOs). WLAs are included from April 2014 onwards. Table No. 45 (-) represents nil or negligible The table format is revised since monthly Bulletin for the month of June 2023. Central Government Dated Securities include special securities and Sovereign Gold Bonds. State Government Securities include special bonds issued under Ujwal DISCOM Assurance Yojana (UDAY). Bank PDs are clubbed under Commercial Banks. The category ‘Others’ comprises State Governments, DICGC, PSUs, Trusts, Foreign Central Banks, HUF/ Individuals etc. Data since September 2023 includes the impact of the merger of a non-bank with a bank. RBI Bulletin August 2025 177CURRENT STATISTICS Table No. 46 GDP data is based on 2011-12 base. GDP for 2023-24 is from Union Budget 2023-24. Data pertains to all States and Union Territories. 1 & 2: Data are net of repayments of the Central Government (including repayments to the NSSF) and State Governments. 1.3: Represents compensation and assignments by States to local bodies and Panchayati Raj institutions. 2: Data are net of variation in cash balances of the Central and State Governments and includes borrowing receipts of the Central and State Governments. 3A.1.1: Data as per RBI records. 3B.1.1: Borrowings through dated securities. 3B.1.2: Represent net investment in Central and State Governments’ special securities by the National Small Savings Fund (NSSF). This data may vary from previous publications due to adjustments across components with availability of new data. 3B.1.6: Include Ways and Means Advances by the Centre to the State Governments. 3B.1.7: Include Treasury Bills, loans from financial institutions, insurance and pension funds, remittances, cash balance investment account. Table No. 47 SDF is availed by State Governments against the collateral of Consolidated Sinking Fund (CSF), Guarantee Redemption Fund (GRF) & Auction Treasury Bills (ATBs) balances and other investments in government securities. WMA is advance by Reserve Bank of India to State Governments for meeting temporary cash mismatches. OD is advanced to State Governments beyond their WMA limits. Average amount Availed is the total accommodation (SDF/WMA/OD) availed divided by number of days for which accommodation was extended during the month. - : Nil. Table No. 48 CSF and GRF are reserve funds maintained by some State Governments with the Reserve Bank of India. ATBs include Treasury bills of 91 days, 182 days and 364 days invested by State Governments in the primary market. --: Not Applicable (not a member of the scheme). The concepts and methodologies for Current Statistics are available in Comprehensive Guide for Current Statistics of the RBI Monthly Bulletin (https://rbi.org.in/Scripts/PublicationsView.aspx?id=17618) Time series data of ‘Current Statistics’ is available at https://data.rbi.org.in. Detailed explanatory notes are available in the relevant press releases issued by RBI and other publications/releases of the Bank such as Handbook of Statistics on the Indian Economy. 178 RBI Bulletin August 2025RREECCEENNTT PPUUBBLLIICCAATTIIOONNSS Recent Publications of the Reserve Bank of India Name of Publication Price India Abroad 1. 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