Budget 2026: How robust non-tax revenues help the Centre salvage tax shortfall, in charts

Subscribe to enjoy similar stories. The Union Budget presented on Sunday confirms a trend that has been building through FY26: the government is contending with a sizeable tax shortfall in the current fiscal year, as collections fall short of budgeted expectations. Slower nominal GDP growth in FY26, coupled with revenue foregone from earlier cuts in income tax and the goods and services tax (GST), has squeezed receipts.

Against this backdrop, Budget 2026 adopts a more conservative stance on tax projections, pegging gross tax revenue growth at 8% in FY27, down from the 10.8% assumed for FY26. That caution, however, is partly offset by an unexpectedly strong showing in non-tax revenues, which has given the Centre some fiscal breathing room. Gross tax revenues, the backbone of government receipts, are estimated to have grown 7.41% year-on-year in FY26, according to revised estimates in the budget documents.

At ₹40.78 trillion, collections reached 95.5% of the budget estimate of ₹42.7 trillion, implying a shortfall of nearly ₹2 trillion against the official target. For FY27, gross tax revenues have been pegged at ₹44.04 trillion. Income tax collections, which account for nearly a third in gross tax revenues, have been pegged at ₹14.7 trillion for FY27, a 12% year-on-year growth.

Goods and services tax collections – the second biggest head in the tax pie – is pegged at ₹10.2 trillion for FY27, a fall of 2.6% year-on-year compared with FY26 revised estimates. Excise duties, though, have been a saviour in an otherwise sombre tax environment, with revised estimates for FY26 coming in at ₹3.4 trillion, 106% of budget estimates, and the government pegging the FY27 figure at ₹ 3.9 trillion. Last year, excise duty was hiked on