Indian government struggles to meet FY27 direct tax target ₹26.97L/cr
Business
The Indian government is having a tough time hitting its direct tax goal of ₹26.97 lakh crore for fiscal 2027.
Tax collections in fiscal 2026 grew just 5%, a lot less than the expected 11%, and ended up ₹82,000 crore short, mainly because income and corporate taxes didn't bring in as much as hoped.
FY27 deficit may reach 4.5%-4.6% GDP
Because tax revenues are lagging, the fiscal deficit could reach 4.5% to 4.6% of GDP in FY27 instead of the planned 4.3%.
Slower company profits, weaker wage growth, and new tax exemptions are making it harder to boost collections.
On top of that, high interest payments (about 40% of revenue) and rising expenses are squeezing the government's budget even more, making financial management trickier for now.