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Govt confident of meeting fiscal deficit target despite planned tax cuts

In the biggest tax overhaul since 2017, PM Modi on Saturday announced sweeping changes to the complex goods and services tax (GST) regime which will make daily essentials and electronics cheaper

"India's federal and state governments have options to offset any loss of revenue due to lowering of rates," the government source said without providing further details.

Reuters NEW DELHI

1 min read Last Updated : Aug 17 2025 | 9:54 PM IST

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India is confident of meeting its fiscal deficit target of 4.4 per cent for the current fiscal year, according to a government source with knowledge of the matter, despite its plans to cut consumption tax later this year.

In the biggest tax overhaul since 2017, Prime Minister Narendra Modi on Saturday announced sweeping changes to the complex goods and services tax (GST) regime which will make daily essentials and electronics cheaper.

"India's federal and state governments have options to offset any loss of revenue due to lowering of rates," the government source said without providing further details.

The source also said it will end the practice of collecting compensation cess by December. The GST compensation cess is an additional levy imposed on certain items to compensate states for any revenue loss incurred due to the implementation. India's finance ministry did not respond to a request for comment sent outside of office hours.

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