Whalesbook
Analysts at Moody's Ratings and Morgan Stanley report that India's government revenue growth is under pressure in FY26. Tax cuts, including higher income-tax exemption limits and reduced GST rates, alongside slower tax collection, have significantly impacted revenue inflows. This limits the government's ability to provide further fiscal support and heightens concerns about meeting the fiscal deficit target. Experts suggest this may lead the Reserve Bank of India to consider further rate cuts if inflation continues to ease.