An EY report suggests that India requires a tax buoyancy of 1.2-1.5 to reach a growth rate of 6.5-7%
In order to effectively enhance its financial capabilities, the Central government will have to significantly bolster its efforts in revenue generation. This is especially crucial as it aims to elevate the tax-to-GDP ratio, which is currently projected at approximately 12.0% for the fiscal year 2026, as per the budget estimates, to a more ambitious target of 14.0% by the conclusion of fiscal year 2031.
Financial institutions remain wary of lending to microfinance organizations, even with reductions in risk weights.
The Reserve Bank of India (RBI) made an important announcement, indicating that it has opted to lower the risk weights for bank loans directed towards non-banking financial companies and the microfinance industry, bringing them down from 125% to a more accommodating 100%.
