According to data released by the Ministry of Finance, India’s fiscal deficit for April–February FY2026 stood at ₹12.5 lakh crore, which is 80.4% of the full-year target, compared to ₹13.5 lakh crore (86%) in the same period last year. The improvement came despite a 15% rise in capital expenditure, supported by just 1% growth in revenue expenditure, helping contain the fiscal gap.
Key Fiscal Indicators (Apr–Feb FY26)
- Fiscal Deficit: ₹12.5 lakh crore (80.4% of FY26 target)
- Total Expenditure: ₹40.44 lakh crore (81.5% of target)
- Revenue Expenditure: ₹31.15 lakh crore
- Capital Expenditure: ₹9.29 lakh crore
- Revenue Deficit: ₹3.89 lakh crore (73.8% of estimate)
- Primary Deficit: ₹1.87 lakh crore (65.9% of estimate)
Expenditure Profile
Revenue Expenditure
- ₹31.15 lakh crore (80.5% of revised estimate)
- Growth contained at ~1% YoY
Capital Expenditure
- ₹9.29 lakh crore (84.8% of budget target)
- Reflects continued focus on infrastructure development
Major Components of Revenue Spending
- Interest Payments: ₹10.65 lakh crore
- Account for over 26% of total spending
- Subsidies (Total): ~₹3.9 lakh crore (91% of RE)
- Food subsidy: ₹1.93 lakh crore
- Fertiliser subsidy: Near full-year target
- Petroleum subsidy: ₹8,823 crore (58% of estimate)
Receipts & Revenue Trends
- Net Tax Revenue: ₹21.45 lakh crore (↑ 6.4% YoY)
- Total Receipts: ₹27.92 lakh crore (82% of RE)
- Non-Tax Revenue: ₹5.81 lakh crore. Supported by surplus transfers from the Reserve Bank of India
- Non-Debt Capital Receipts: ₹65,547 crore
Fiscal Financing
- Total financing: ₹12.53 lakh crore
- Dominated by domestic sources, especially market borrowings
Centre–State Fiscal Transfers
- Devolution to States: ₹12.66 lakh crore
- Increase of ₹85,837 crore over previous year
Analysis & Projections
- Economist Aditi Nayar projects:
- FY26 Fiscal Deficit: ~4.5% of GDP
- Higher than Revised Estimate (RE): 4.3%
Reason: Downward revision in nominal GDP (2022–23 series vs 2011–12 series)
Future Fiscal Risks
- Excise duty cut on fuels:
- Estimated revenue loss: ₹1–1.2 lakh crore in FY2027
- Equivalent to ~0.3% (30 bps) of GDP
- Partial offset expected via:
- Allocations under Economic Stabilisation Fund (ESF)
Key Insights
- Fiscal consolidation achieved through:
- Controlled revenue expenditure
- Strong non-tax revenue (RBI transfers)
- Government maintained high capital expenditure, indicating focus on growth
- Rising interest burden remains a concern
- Fiscal outlook sensitive to:
- GDP revisions
- Tax revenue fluctuations
- Policy decisions (e.g., fuel excise cuts)