New Delhi, Sept. 1 -- Strong tax collections are providing a cushion to the Centre's finances, but higher crude and fertiliser prices and slower-than-expected nominal GDP growth could make it more difficult for the government to meet its 4.3 per cent fiscal deficit target for financial year 2026-27, ICICI Bank Research said.

In its Monthly Economic Update for August, ICICI Bank Research said the Centre's gross tax revenue grew 18 per cent during April-July 2026, supported by a 24 per cent year-on-year rise in direct tax collections and 11 per cent growth in GST collections.

The report said the fiscal balance stood at Rs 4.6 trillion during the period, equivalent to 27 per cent of the FY27 Budget Estimate, compared with 30 per cent durin...