Fiscal Deficit at 29.9% of Full-Year Target at July-End: Govt Data

Centre's fiscal deficit increased to 29.9% of the full-year target at the end of July, according to data released by the Controller General of Accounts (CGA) on Friday.

The fiscal deficit was 17.2% of the Budget Estimates (BE) of 2024-25 in the first four months of the previous financial year.

The same stood at 17.9% of the full-year target at the end of the first quarter (April-June).

In absolute terms, the fiscal deficit, or gap between the government's expenditure and revenue, was ₹4,68,416 crore in the April-July period of 2025-26.

The Centre estimates the fiscal deficit during 2025-26 at 4.4% of the GDP, or ₹15.69 lakh crore.

The CGA data showed, the government received ₹10.95 lakh crore (31.3% of the corresponding BE 2025-26 of total receipts) up to July 2025.

It comprised ₹6.61 lakh crore tax revenue (Net to Centre), ₹4.03 lakh crore of non-tax revenue and ₹29,789 crore of non-debt capital receipts.

Further, it said ₹4.28 lakh crore has been transferred to state governments as devolution of share of taxes by the Government of India during the period, which is ₹61,914 crore higher than the previous year.

The total expenditure incurred by the Centre was ₹15.63 lakh crore – 30.9% of the corresponding BE 2025-26, out of which ₹12,16,699 crore was on the revenue account and ₹3.46 lakh crore on the capital account.

Of the total revenue expenditure, ₹4.46 lakh crore was on account of interest payments and ₹1.13 lakh crore towards major subsidies.

Aditi Nayar, Chief Economist at ICRA Ltd, said a contraction in the personal income tax collections in July 2025, owing to the extension of the deadline to file taxes and an adverse base, pulled down the performance of gross tax revenues in the month, even as devolution to states maintained a robust pace, further compressing the performance of net tax revenues.

While revenue expenditure expanded by 17%, capital expenditure surged by 33% on the last year's election-curtailed base, she added.

While this fiscal headroom could be cut short by the implications of the proposed GST changes on revenues, more clarity is awaited on the same, Nayar added.

CGA said the fiscal deficit figure shown in monthly accounts during a financial year is not necessarily an indicator of fiscal deficit for the year, as it gets impacted by a temporal mismatch between the flow of non-debt receipts and expenditure up to that month