<h1>EY Report: India Needs 1.2-1.5 Tax Buoyancy for 6.5-7% GDP Growth; Calls for Increased Tax-to-GDP Ratio</h1> India needs a tax buoyancy of 1.2-1.5 to achieve a GDP growth of 6.5-7%, according to an EY report. To support this growth, the government should increase the tax-to-GDP ratio from 12% in FY26 to 14% by FY31. The report emphasizes the importance of enhancing tax buoyancy, managing expenditures prudently, and implementing structural reforms. It highlights that maintaining tax buoyancy will provide fiscal space for infrastructure and social sector investments. The report also notes a decline in tax revenue buoyancy and recommends reducing the fiscal deficit to GDP ratio to 3% to align with fiscal responsibility norms.