'Hoping For Healthy Economic Growth To Boost Tax Revenue

Addressing a webinar, S&P economists said that the targets set by India on the revenue side are realistic, including the enhanced dividend from the RBI."Before the government announces the Budget, they have already been in very close talks with the RBI to discuss how much dividend can be given to the government for this year to supplement the Budget,' an S&P economist said.

The Centre has set a target of achieving a fiscal deficit of 4.4 per cent of GDP in FY26 down from RE FY25 of 4.8 per cent.S&P economists said that likelihood of strong economic growth to be maintained at levels well above other economies of similar income levels along with continued focus on ensuring that revenues are maintained at a relatively high level, while bringing the fiscal deficit down, is likely to improve the fiscal metrics and potentially all the metrics.

Talking about the tax incentives announced in the Budget, the S&P economist said, "The idea for the Indian government was really to return more consumption spending back to consumers so as to drive growth. And what they are hoping for is really for steady healthy economic growth to boost income tax revenue."

-- Business Standard