Policy Newsletter | May 2026

India moves from Reform to Delivery

As we enter the third year of the current government’s five-year term, the shift in focus from announcing reforms to implementing the institutional frameworks needed for long-term economic growth is discernible. In May, this was the predominant trend across financial regulation, digital governance, AI, advanced manufacturing and cross-border investments. At home, the emphasis was on execution, while India's global engagement continued to prioritize trusted partnerships and resilient supply chains.

A significant macroeconomic development during the month was the Reserve Bank of India's decision to transfer a record surplus of ₹2.69 lakh crore (approximately US$32.3 billion) to the Government for FY 2025-26, substantially exceeding market expectations. Supported by strong foreign exchange operations and investment income, the transfer provides the Government with additional fiscal space at a time when public capital expenditure, manufacturing