Winning Bizness Economic Desk

India’s Eco Likely to Grow 6.3-6.8 pc in FY 26

The country’s economy is projected to grow between 6.3 per cent and 6.8 per cent in the financial year 2025-26 (FY 26). This is according to the Economic Survey presented by union finance minister Mrs Nirmala Sitharaman.

The forecast is in line with the economic growth predictions made by international agencies such as the International Monetary Fund (IMF), Asian Development Bank (ADB) and the World Bank (WB).

The IMF has kept India’s GDP growth forecast unchanged at 6.5 per cent for FY 25 and FY 26 while the World Bank’s projection is 6.7 per cent.

The Asian Development Bank in December 2024, had also revised southward the country’s GDP growth forecast for this fiscal (FY 25) to 6.5 per cent from seven per cent.

For FY 26, the growth forecast was revised lower to seven per cent from 7.2 per cent.

This adjustment reflects the weaker-than-expected growth in the July-to-September quarter, driven by slowdowns in manufacturing and government spending.

The key factors behind this slowdown include sluggish manufacturing activity and reduced government expenditure.

The revised numbers, it must be pointed out here, contrast with last year’s Economic Survey projection of 6.5-to-7 per cent growth for FY 25 and the Reserve Bank of India (RBI)’s latest forecast of 6.6 per cent for the same period.

The first advance estimate released by the government on January 7 predicted a GDP growth of 6.4 per cent in FY 25 as against the last financial year’s 8.2 per cent growth.

The Economic Survey published in July 2024 had forecast a growth of between 6.5-to-7 per cent for this fiscal, while in November, the finance ministry adjusted its projections to 6.5 per cent.

Second Highest GST Revenue Collection in January

The Goods and Services Tax (GST) collections moved northward steeply by 12.3 per cent from December’s 7.3 per cent at Rs 1,95,506-crore, the second highest-ever collection.

Domestic revenues rose ten per cent while revenues from imports moved up 19.8 per cent.

Gross GST inflows had touched a three-month low of just under Rs 1.77-lakh-crore in December—the second slowest pace in 43-months.

Since the launch of the GST regime in July 2017, the highest mop-up was in April 2024 when gross receipts clocked over Rs 2.1-lakh-crore.

After factoring in refunds to tax-payers, which expanded 23.9 per cent to about Rs 24,000-crore, net receipts from GST were up 10.9 per cent in January at Rs 1,71,563-crore.

Net receipts from domestic transactions were up 8 per cent while those from imports grew 21.7 per cent.

On a sequential basis, January’s net GST receipts linked to transactions undertaken in December, were up 11.2 per cent from December while gross GST receipts were 10.5 per cent higher.

A point to be highlighted here is that January’s increase in receipts lifted the overall growth in net GST revenues in 2024-25 to 8.7 per cent from 8.6 per cent as of December, with collections of almost Rs 16.17-lakh-crore.

Last month, three states clocked a contraction in GST revenues as compared to four in December and seven in November. Thirteen states reported a revenue growth below the 10 per cent national average growth in domestic transaction revenues.

Punjab Registers Record GST Collections

Punjab’s Finance, Planning, Excise and Taxation minister Mr Harpal Singh Cheema, has said that the state has registered a 11.87 per cent growth in net Goods and Services Tax (GST) collection up to January, surpassing the national average of ten per cent.

The state also clocked a 15.33 per cent increase in excise revenue and an overall 11.67 per cent increase in tax collections from net GST, excise, VAT, CST and PSDT.

In a press communique, Mr Cheema said that Punjab is among the top three general category states exceeding the national GST growth rate.

The state’s net GST collection up to January stood at Rs 19,414.57-crore, up from Rs 17,354.26-crore in the same period of FY 24, marking an increase of Rs 2,060.31-crore.

What needs highlighting here is that in January alone, Punjab registered a 9.73 per cent growth in net GST, collecting Rs 2,008.58-crore as against Rs 1,830.52-crore in January 2024.

Mr Cheema said that Rs 8,588.31-crore of excise revenue was collected up to January of this fiscal as against Rs 7,446.46-crore in the year-ago period.

Total collection from net GST, excise, VAT, CST and PSDT up to January 2025 stood at Rs 34,704.4-crore, a net growth of Rs 3,625.46-crore over the Rs 31,078.94-crore collected in the same period last fiscal.

Overall, tax collection in January of this year moved northward by 12.48 per cent to Rs 3,545.09-crore as against Rs 3,151.63-crore in January 2024.

Mr Cheema credited the Excise and Taxation Department initiatives for increasing revenue without causing harassment, attributing the growth to plugging loopholes and tightening checks on tax evaders.

India’s Telecom Revenue Likely to Plunge 33 pc in FY 26

Telecom revenue is expected to slide southward sharply by over 33 per cent to Rs 82,442.84-crore in FY 26, down from the Rs 1,23,357.20-crore in the current fiscal year, according to budget documents.

This big slide is anticipated despite upcoming regulatory payments from telecom operators for deferred spectrum and AGR dues after the moratorium ends in September 2025.

The government’s telecom revenue primarily consists of license fees and spectrum usage charges (SUC), both calculated based on telcos’ adjusted gross revenue (AGR).

While operators pay eight per cent of their AGR as license fees, SUC, previously around 3-to-4 per cent, has slid to under one per cent after removing the three per cent floor and the government’s decision to waive SUC for spectrum acquired after July 2022.

Revenue from captive telecom networks is generated through fixed license fees and a small one-time entry fee.

Higher revenue in FY 25 is attributed to spectrum allocations to BSNL and the Railways, substantial advance payments from Bharti Airtel for past spectrum auctions, and proceeds from the second 5G spectrum sale.

A portion of the Rs 11,320.78-crore raised from this 5G auction was also included in FY 25’s revenue.

The latest Budget has accorded tremendous importance on developing the country’s digital infrastructure. BharatNet allocation has been substantially increased by 238 per cent Year-on-Year (YoY) to Rs 22,000-crore in FY 26.