New Delhi, Nov. 2 -- Despite muted tax growth in the first half of FY26, the Centre has managed to keep its finances on track, thanks largely to windfall dividends from the Reserve Bank of India (RBI) and other state-owned entities. The additional revenue cushion helped contain the fiscal deficit at just 36.5% of the budget aim in April-September.

The outcome is telling. Sluggish tax growth usually squeezes a government's spending ability, but this year's data suggest otherwise.

Gross tax revenue grew a muted 2.8% during the first half of current fiscal year (H1FY26), well below the 11% full-year growth projected in the Union Budget.

The slowdown was driven by tepid income-tax growth of 4.7% as against the budgeted 13.1%, anaemic corpo...