New Delhi, Jan. 30 -- Recent tax policy reforms, including the restructuring of personal income tax and the rationalisation of the Goods and Services Tax (GST) rate, have supported consumption demand while sustaining revenues in absolute terms, the Economic Survey said.

The survey explained how the government's policy of rationalizing direct tax slabs and indirect tax rates, coupled with softer inflation, helped improve the real purchasing power of people, giving a boost to consumption amid adverse impacts on the external economy.

FY26 was an unusually challenging year for the economy on the external front. Heightened uncertainty in global trade and the imposition of high, penal tariffs created stress for manufacturers, particularly exp...