Fiscal deficit in H1 rises to 42.1% of FY27 target on higher capex, subsidies
By September 2026, the Centre's fiscal deficit had escalated to ₹7.14 lakh crore, exceeding last year's figures. This increase is fueled by a 10.7% rise in total expenditure, largely a result of heightened capital spending and food subsidies, while petroleum subsidies sharply declined. Gross tax revenue, however, saw a modest growth of 6.1%, even with lower excise duty collections attributed to…
The fiscal deficit for the first half of 2026-27 has increased to ₹7.14 lakh crore, or 42.1% of the government's target for the fiscal year, according to government data released on Friday. This marks a rise from 36.5% in the same period last year. The deficit grew due to a 10.7% increase in total expenditure and a 10.1% rise in government spending on major subsidies, reaching ₹2.23 lakh crore in April-September.
The government had set a fiscal deficit target of 4.3% of GDP, or ₹16.96 lakh crore, for the current fiscal. Capital expenditure accounted for 53.6% of the full-year budget estimate (BE) in H1 2026-27, up from 51.8% a year earlier. In September, the fiscal gap was ₹4,164 crore, compared to a surplus of ₹25,030 crore in the same period last year.
The Centre's gross tax revenue grew 6.1% year-on-year in April-September, despite a fall in excise duty collection due to duty cuts on petrol and diesel.
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