New Delhi, Jan. 8 -- As Union Budget 2026 approaches, the government is grappling with a likely Rs.1.5-2 trillion tax shortfall in FY26, driven by slower nominal GDP growth, weaker corporate tax collections, and GST rate cuts that were not fully factored into last year's estimates. Tax revenues grew just 3.3% in April-November, far below the budgeted 10.8%.

Yet the fiscal picture is less alarming than the numbers suggest. Non-tax revenues have provided a strong buffer, with dividends and profits from the RBI and public sector firms already exceeding annual targets by November. Disinvestment receipts have also staged a comeback after years of underperformance.

Crucially, upward revisions to GDP data mean the deficit ratio benefits from a...