India’s government has slashed income taxes and the central bank cut its key rate for the first time in five years to boost economic growth. However, investor response remains muted, with markets reacting cautiously.

BulletsIn

• Modi govt announced historic tax cuts in budget.
• RBI cut key rate by 25 basis points after five years.
• Investor response weak; Nifty 50 fell 0.2%.
• RBI kept policy stance “neutral,” not “accommodative.”
• Rupee at record low, limiting future rate cuts.
• No new liquidity measures from RBI for markets.
• Economists expect just one more rate cut in April.
• Govt relies on RBI dividend to fund ₹1 trillion tax cuts.
• Growth concerns persist amid weak consumer sentiment.
• RBI forecasts 6.7% growth; govt aims for 7%.