No Revenue shortfall foreseen, Government to achieve deficit target: MoS Finance
Minister of State for Finance Pankaj Chaudhary announced that the government anticipates no revenue shortfall for FY26, maintaining its projected 4.4% fiscal deficit. The government also detailed revenue foregone through corporate tax cuts aimed at stimulating economic growth.
New Delhi: Minister of State for Finance Pankaj Chaudhary informed Parliament on Tuesday, 22nd July 2025, that the government is not foreseeing any revenue shortfall at this stage and aims to achieve the mandated targets fixed in the budget estimates for 2025-2026.
The budget estimated the fiscal deficit for the fiscal year 2025-26, at 4.4 percent of GDP, amounting to Rs 15.69 lakh crore. The minister said the central government is helping state governments to carry out capital expenditure through Finance Commission Grants apart from the mandated 41 percent tax devolution from the central pool of taxes, through Centrally Sponsored Schemes, and through loans provided to state governments in the form of Special Assistance, the minister said in a written reply in the Rajya Sabha
The total resources transferred to the states are estimated to be Rs 25.01 lakh crore in the budget estimates for the fiscal year 2025-26, FY26.
Corporate revenue tax foregone
MoS stated that the government had foregone revenue worth Rs 99000 crore in FY24 in the form of tax incentives. The benefits had been extended to corporates, and the move was done to encourage economic growth in the economy.
MoS Finance gave the data on the revenue foregone by the Government of India for the 4 fiscal years. from FY 2020 to 2024.
The government had foregone revenue worth Rs 98999 crore in FY24, followed by Rs 88109 crore in FY23 and Rs 96892 crore in FY22. The corporate tax revenue forgone was Rs 75218 crore in the fiscal year FY21 and Rs 8043 crore in the fiscal year of 2019-2020 (FY20).
The minister gave all this data while replying to the question asked by AAP MP Raghav Chadha on the subject of exchequer loss to the government from FY20 to FY25. The data for the financial year 2025 (FY25) is not currently available, thereby the estimated revenue foregone for FY25 is not available.
Through the Finance Act 2016, the corporate tax was reduced to 29 percent of the total income to promote growth, boost investment, and create more opportunities. In 2017, the government reduced the corporate tax to 25 percent of the total income, and in September 2019, the government announced a cut taking it further down to 22 percent.