GST trails annual tax target; Budget deficit could top 3.5% if trend holds

India needs the revenue to keep its budget deficit in check as Modi prepares to ramp up spending on welfare programs from health to farming before general elections next year

One year after India introduced a consumption tax, the results have been mixed.

Hailed as one of the biggest reforms by Prime Minister Narendra Modi, the goods-and-services levy has helped increase tax collections in a country where compliance is historically low.

While monthly receipts have picked up after a chaotic rollout, they are still not strong enough to meet the government’s annual tax target. GST brought in an average Rs 975.4 billion ($14.2 billion) a month in revenue, government data reported in the three months to June show, compared with a target of nearly Rs 1.1 trillion.

India needs the revenue to keep