Net tax revenue at the end of September was over `12.29L cr, down from `12.65L cr in the corresponding period of last fiscal

PTI New Delhi

Moody's Ratings on Tuesday said tax cuts in the current fiscal has dented India's revenue growth, leaving less scope for fiscal policy support for the economy.  "Revenue growth has been fairly weak and there are probably some constraints in terms of fiscal consolidation ... We have seen some tax cuts as well, and that is additionally weighing on revenue growth. There is probably less scope for fiscal policy support for the economy," Moody's Ratings Vice President - Senior Credit Officer, Sovereign Risk Martin Petch said at a webinar.  

According to CGA data, net tax revenue at the end of September was over Rs 12.29 lakh crore, down from Rs 12.65 lakh crore in the corresponding period of last fiscal.  As per the data, only 43.3 per cent of the budget estimates of tax collection was achieved till September of FY26, as against 49 per cent achieved in the corresponding period of FY25. The government in Budget for 2025-26 fiscal year has hiked I-T rebate to Rs 12 lakh, from Rs 7 lakh, which gave tax relief of Rs 1 lakh crore to the middle class. 

Further, effective September 22 the GST rates on about 375 items were slashed making mass consumption items cheaper. These measures were aimed at boosting consumption. As per the fiscal consolidation roadmap, India targets to bring down the fiscal deficit to 4.4 per cent of GDP in current fiscal.