Revenue growth under pressure amid tax cuts: Moody’s

New Delhi: Moody’s Ratings on Tuesday said tax cuts in the current fiscal have dented India's revenue growth, leaving less scope for fiscal policy support for the economy."Revenue growth has been fairly weak and there are probably some constraints in terms of fiscal consolidation ... We have seen some tax cuts as well, and that is additionally weighing on revenue growth. There is probably less scope for fiscal policy support for the economy," Moody's Ratings Vice President - Senior Credit Officer, Sovereign Risk Martin Petch said at a webinar.

According to CGA data, net tax revenue at the end of September was over Rs 12.29 lakh crore, down from Rs 12.65 lakh crore in the corresponding period of last fiscal. As per the data, only 43.3 per cent of the budget estimates of tax collection was achieved till September of FY26, as against 49 per cent achieved in the corresponding period of FY25. The government in Budget for 2025-26 fiscal year has hiked I-T rebate to Rs 12 lakh, from Rs 7 lakh, which gave tax relief of Rs 1 lakh crore to the middle class.