Despite energy prices remaining elevated due to the war in West Asia, the government is confident the economy has continued to perform well in the ongoing April-June quarter, with the high growth seen in January-March spilling over into the new fiscal year that started in April, a senior official told The Indian Express on the condition of anonymity.Further, the tax cuts announced last week for foreign institutional investors’ (FIIs) investments in government bonds were squarely aimed at accelerating India’s inclusion in the Bloomberg Global Aggregate Bond Index, with the source adding that more steps will continue to be taken to attract foreign inflows. There was no elaboration of the measures that would be taken.“The feedback that we are getting from industry and banks is that growth from the fourth quarter has continued into April-June and it is reflecting in economic data,” the official said. “Be it cement, production of cars, Fast Moving Consumer Goods, and even consumer durables, there is clear indication that growth is sustaining despite the problems emanating from outside India.”“Even GST collections, the revenue from imports has jumped almost 20%. And this is not because consumer goods are being imported in huge numbers — it is intermediate goods, machinery, inputs that industry uses that are being purchased from abroad,” the source added.Data released last week showed the Indian economy ended 2025-26 on an unexpectedly strong note, with the GDP estimated to have grown 7.8% in January-March on the back of higher growth in investments despite the war overlapping with the final month. For the year as a whole, India’s GDP has been estimated to have increased by 7.7%, higher than the statistics ministry’s second advance estimate of 7.6%, announced in February.India’s GDP growth in 2024-25 was 7.1%. Moreover, while overall Goods and Services Tax (GST) collections rose only 3% year-on-year in May, that from imports surged 19.1%. Further, industrial growth rose to 4.9%, with manufacturing sector growth at 6.2%.Meanwhile, the Reserve Bank of India (RBI) on Friday lowered its GDP growth forecast for 2026-27 by 30 basis points (bps) to 6.6%, with the Monetary Policy Committee noting that prolonged global supply chain disruptions, heightened volatility in global financial markets, and weather-related shocks “continue to pose downside risks to the domestic growth outlook”.Story continues below this adAccording to the aforementioned source, the RBI’s downward revision to the growth forecast is understandable. “The RBI needs to be conservative, and that’s what it has done. And that’s OK.”“The government has taken measures to help affected areas: there is the maritime insurance pool, the ATF Price Stabilisation Fund, and the Budget announced the Economic Stabilisation Fund… We are recognising where the pressures are and acting to ease them.”Bloomberg index inclusionOn Friday, the government and the RBI announced a host of steps to attract foreign capital — from the scrapping of capital gains and withholding tax on FII investment in government debt to concessional windows to boost foreign currency deposits and loans — with The Indian Express reported Sunday that the Economic Advisory Council to the Prime Minister, at its meeting on Saturday, thinks the measures may pull around $70 billion over a period of time.According to the government source, the removal of the tax on long-term and short-term capital gains as well as the withholding tax on investment by FIIs in government bonds was to push India’s case to get included in the Bloomberg Global Aggregate Bond Index.Story continues below this ad“The current treatment of interest and capital gains income earned by FIIs reduces the effective post-tax yield on government securities relative to comparable sovereign instruments in peer emerging markets, many of which are already index constituents. Addressing this structural disadvantage is necessary to make government bonds genuinely competitive in the global sovereign debt market,” the source said, adding that becoming part of the index would “unlock a substantial and predictable pool of passive capital flows”.In mid-January, Bloomberg Index Services Ltd had deferred the inclusion of Indian government bonds into its flagship global index.Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read MoreAanchal Magazine is a Deputy Associate Editor with The Indian Express, serving as a leading voice on the macroeconomy and fiscal policy. With 15 years of newsroom experience, she is recognized for her ability to decode complex economic data and government policy for a wider audience. Expertise & Focus Areas: Magazine’s reporting is rooted in "fiscal arithmetic" and economic science. Her work provides critical insights into the financial health of the nation, focusing on: Macroeconomic Policy: Detailed tracking of GDP growth, inflation trends, and central bank policy actions. Fiscal Metrics: Analysis of taxation, revenue collection, and government spending. Labour & Society: Reporting on labour trends and the intersection of economic policy with employment. Her expertise lies in interpreting high-frequency economic indicators to explain the broader trajectory of the Indian economy. Personal Interests: Beyond the world of finance and statistics, Aanchal maintains a deep personal interest in the history of her homeland, Kashmir. In her spare time, she reads extensively about the region's culture and traditions and works to map the complex journeys of displacement associated with it. Find all stories by Aanchal Magazine here ... Read More Tags:Indian economy