New Delhi: Signs of economic progress and improved revenue collection are becoming increasingly evident across the country. Projections indicate that in fiscal year 2026, states’ income from the Goods and Services Tax (GST) is expected to surpass budget estimates. According to officials from the central government and the Ministry of Finance, record growth in GST revenue is being observed due to consistent improvements in tax compliance, the rapid expansion of digital transactions, and a sustained rise in overall economic activity.
For FY 2025–26, states’ GST revenues are anticipated to grow by an average of 10 to 12 percent. In just the first six months of the current fiscal year, GST collections have already crossed ₹8.5 lakh crore, marking an increase of approximately 11 percent compared to the same period last year. Experts believe that if this momentum continues, total annual GST revenue could exceed ₹18 lakh crore by 2026.
A senior official from the Ministry of Finance noted that between 2019 and 2025, tax collections recorded an average annual growth of around 10 percent. Following the end of the GST compensation period, this continued growth is expected to provide significant relief to state governments and strengthen their fiscal positions.
Measures such as enhanced digital monitoring, mandatory e-invoicing, and crackdowns on fraudulent billing have curbed tax evasion effectively. Additionally, small businesses have been brought under a simplified GST return framework, broadening the tax base.
Economic analysts suggest that rising GST revenues will give states additional resources to fund development projects, social welfare programs, and infrastructure initiatives. This, in turn, will reinforce the nation’s fiscal stability and help maintain a healthy balance in Centre–State financial relations.
In conclusion, fiscal year 2026 could emerge as a significant milestone in India’s tax reform journey, with GST collections likely to surpass expectations and set new benchmarks for fiscal performance.
