Archive · 29 May 2025
India's Economy to Remain Strong in FY26, Tax Revenue Up
India's economy is expected to keep growing quickly.
Tax collections are projected to reach a high level, with the government expecting more money.
The RBI thinks things look good, with low inflation, normal rainfall expected, and possibly two rate cuts.
However, global issues like trade problems could be challenges.
The economy is seen growing at 6.5% to 6.6% in the next fiscal year.
India is expected to be the fastest-growing major economy in FY26.
Tax revenue is projected to hit 12% of GDP in FY26, the highest in nearly two decades.
RBI expects to cut rates twice more before a pause.
Crisil forecasts a GDP growth of 6.5% in fiscal year 2026.
Direct taxes are expected to reach 7.1% of GDP in FY26, and indirect taxes at 4.9%.
- Who
- Reserve Bank of India (RBI), Crisil.
- What
- India's economic outlook and tax revenue projections.
- When
- FY26 (fiscal year 2025-2026).
- Where
- India
- Why
- Due to factors like robust tax collection, easing inflation, and the expectation of normal monsoons.
Potential Concerns
Optimistic Outlook
Global Headwinds
Potential Concerns
Global market volatility, geopolitical tensions, trade fragmentation and supply chain issues pose risks.
Optimistic Outlook
Trade pacts and resilient exports are expected to help counter external headwinds.
- Projected GDP Growth
- FY26
- Projected Tax Revenue to GDP (FY26)
- 12.0%
- FY26 GFD (Gross Fiscal Deficit)
- 4.4%
- Crisil's GDP growth forecast for FY26
- 6.5%
Sources
At 2.7%, industrial output growth slips to 8-month low
Polls, project delays hit construction equipment market
India poised to remain fastest growing major economy in FY26: RBI
Crisil pegs India's GDP growth at 6.5 pc in fiscal 2026
Expect two RBI rate cuts before policy pause as growth nears potential: Dharmakirti Joshi
