{
  "id": 17830319,
  "title": "Centre's FY27 fiscal deficit may exceed Budget target by Rs 1.2 lakh crore: SBI Research",
  "url": "https://urgent.news/2026/11/02/centres-fy27-fiscal-deficit-may-exceed-budget-target-by-rs-1-2-lakh",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-11-02T17:09:41.000Z",
  "source": {
    "name": "The Economic Times - Economy",
    "slug": "the-economic-times-economy",
    "url": "https://economictimes.indiatimes.com/news/economy/policy/centres-fy27-fiscal-deficit-may-exceed-budget-target-by-rs-1-2-lakh-crore-sbi-research/articleshow/135468858.cms"
  },
  "original_language": "en",
  "account": "The central government's fiscal deficit for the fiscal year 2026-27 is expected to surpass the budgeted amount by Rs 1.2 lakh crore, according to a report by SBI Research. This projection is primarily driven by structural factors, including heightened expenditure on fertiliser, LPG, and petroleum subsidies, as well as the influence of the new GDP base. The projected fiscal deficit stands at 4.7 per cent, calculated using the 2022-23 base, while the budgeted deficit of 4.3 per cent was derived from the 2011-12 base.\n\nThe report attributes the surge in excise duties to an additional Rs 1.1 lakh crore loss due to a Rs 90,000 crore increase in fertiliser subsidies and approximately Rs 48,000 crore in petroleum/LPG subsidies. Despite a stronger-than-anticipated growth in GST, better disinvestment receipts, and a slight reduction in capital expenditure, the fiscal deficit is anticipated to rise. The report suggests that the Centre can manage this wider fiscal deficit by utilizing government cash balances, which are projected to reach Rs 8.5 lakh crore by October-end 2026, up from Rs 2.2 lakh crore at the end of the previous year, and could further increase to Rs 2.5 lakh crore by March-end 2027.\n\nDuring the first half of fiscal year 2027 (FY27), both tax and non-tax revenue receipts saw a 3.6-3.8 per cent increase, while total expenditure grew by 10.7 per cent. Consequently, the fiscal deficit, in actual terms, has surged by 25 per cent to Rs 7.14 lakh crore compared to the same period in the previous year. SBI Research recommends implementing a layered long-term capital gains (LTCG) structure to generate additional revenue for the government. This proposed structure should incorporate an inflation-linked exemption threshold, reflecting the widening retail investor base, and consider longer investment horizons for preferential treatment. The report also advises reviewing LTCG taxation in tandem with the Securities Transaction Tax (STT). If the STT is increased by 50 per cent, an additional Rs 45,000 crore in revenue could be generated in fiscal year 2028.",
  "summary": "India's central government anticipates a fiscal deficit exceeding budget estimates by Rs 1.2 lakh crore in 2026-27. This increase is primarily attributed to rising fertiliser, LPG, and petroleum subsidy expenses. Strong GST growth and disinvestment receipts may not offset the expected higher deficit. In addition, SBI Research recommends a revised long-term capital gains structure to generate…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}