New Delhi, Jan. 8 -- The budget is around the corner, and the government is staring at a massive tax shortfall. To make matters worse, nominal GDP growth is likely to be slower than anticipated in 2025-26.

However, neither of these two will put the government in an uncomfortable position, as non-tax revenues have exceeded expectations, and the fiscal deficit calculation will benefit from statistical revisions.

The government's tax collections have grown only 3.3% in April-November, sharply lower than the 10.8% growth aimed for in the budget. A number of factors will lead to the shortfall: an optimistic income tax projection (13.1% growth projected in the Budget) despite massive revisions, slow corporate tax collections due to declining ...