The report said India’s expanding network of bilateral trade agreements with major economies has improved its growth trajectory, even as structural reforms continue to reshape the fiscal landscape. “In the background of India’s extensive bilateral trade agreements with other major economies or economic groups, India’s medium-term prospects have brightened up,” said D K Srivastava, Chief Policy Advisor at EY India, while outlining the firm’s growth estimate.
The analysis noted that achieving the government’s long-term Viksit Bharat 2047 vision would require a sustained rise in the tax-to-GDP ratio, primarily through stronger compliance rather than fresh structural overhauls, since most major tax reforms have already been implemented.
According to the report, the current fiscal year saw significant policy changes, especially in personal income tax and the Goods and Services Tax (GST) framework. These steps involved substantial revenue foregone by the government, with the objective of boosting household disposable incomes and supporting private consumption demand — a key pillar of growth.
As a result, gross tax revenues were expected to fall short of FY26 budget estimates. Despite this anticipated gap, the report said markets and analysts broadly expect the government to meet its fiscal deficit target for the year, signalling confidence in fiscal discipline and revenue management.