Fiscal deficit reaches 36.5% of FY26 target as capex rises

India’s fiscal deficit for the April–September 2025 period stood at Rs 5.73 trillion (USD 65.19 billion), representing 36.5 per cent of the full-year target for FY26, according to data released by the Controller General of Accounts (CGA)on Friday. The figures indicate a continued focus on capital expenditure even as revenue receipts remain moderate.
The government’s total receipts up to September reached Rs 17.3 trillion, or 49.5 per cent of the FY26 Budget Estimates (BE). Of this, net tax revenue amounted to Rs 12.3 trillion, slightly below the Rs 12.7 trillion collected in the same period last year. Non-tax revenue, however, surged to Rs 4.7 trillion from Rs 3.6 trillion a year ago, buoyed by higher dividends from the Reserve Bank of India and public sector enterprises.
Transfers to state governments rose to Rs 6.32 trillion, marking an increase of Rs 86,948 crore over the previous year, reflecting greater devolution of taxes and support for state-level fiscal activities.On the expenditure front, total spending increased to Rs 23.03 trillion, accounting for 45.5 percent of the FY26 target, compared with Rs 21.1 trillion a year earlier. Within this, revenue expenditure stood at Rs 17.23 trillion, while capital expenditure focused on infrastructure and asset creation rose to Rs 5.81 trillion from Rs 4.1 trillion last year, underscoring the government’s commitment to driving investment-led growth.
Interest payments during the first half of the fiscal year were recorded at Rs 5.78 trillion, while major subsidies totalled Rs 2.02 trillion.The fiscal outcome so far reflects a measured balance between spending and consolidation. Robust non-tax revenue inflows and strong capital outlay have supported growth momentum, even as moderate tax collections signal the need for continued revenue mobilisation in the latter half of the fiscal year.Economists view the mid-year fiscal position as largely in line with expectations, highlighting that sustained public investment in infrastructure is likely to aid economic resilience, provided fiscal prudence is maintained in the run-up to the FY26 close.

(Business Correspondent)