PwC India sees ₹1.1 trillion shortfall in net tax collections in FY26

PwC India expects buoyant non-tax revenues to offset a projected ₹1.1 trillion shortfall in net tax collections in the financial year 2025-26 (FY26), keeping the fiscal deficit within the target at 4.2-4.4 per cent of gross domestic product (GDP), provided nominal GDP growth reaches at least 9 per cent in the second half of FY26 (April-September). The economy grew 8 per cent in the first half of FY26. Following this uptick, PwC expects growth to moderate to 7 per cent in the second half, putting full-year expansion at 7.5-8 per cent. 

The firm estimates gross tax revenue at ₹40 trillion (94 per cent of the budget estimate) with net tax revenue to the centre likely at ₹26.6 trillion against the budgeted ₹28.4 trillion. Excluding the impact of the now-abolished GST compensation cess, this results in a ₹1.1 trillion shortfall. Total receipts are projected at Rs. 33.4 trillion (96 per cent of the budget estimate), leaving an overall gap of ₹82,000 crore.