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India Reviews Fiscal Projections as Slower Tax Growth Raises Concerns
India is reassessing FY26 revenue assumptions as slower tax growth challenges deficit targets, though strong GST collections are helping stabilize overall fiscal planning.
India’s fiscal planners are reassessing revenue assumptions for FY26 as slower direct tax growth created questions regarding deficit targets. Policymakers emphasized that strong GST collections, supported by festival-driven consumption, continue to provide stability despite lower wholesale rate movements. Government officials noted that compliance improvements and sustained services activity are helping offset pressure from moderating industrial receipts. The finance ministry aims to maintain fiscal discipline while monitoring quarterly inflows and expenditure adjustments to ensure alignment with medium-term consolidation objectives outlined for the next financial cycle.