India’s fiscal deficit for the April–January period stood at ₹9.81 lakh crore, or 63% of the revised annual target of ₹15.58 lakh crore, as per the government data released on Friday.
Notably, the deficit improved from a year ago period when it stood at ₹11.7 lakh crore. However, in the last ten months capex expanded by 11% YoY.
Net tax revenue for April–January rose at a moderate 10% to ₹20.94 lakh crore, compared with ₹19 lakh crore collected during the same period last year, reflecting stronger receipts across major tax categories.
3 February 2026
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Non-tax revenue increased to ₹5.57 lakh crore by 19%, up from ₹4.7 lakh crore a year earlier, aided by higher collections from dividends, spectrum payments and other administrative sources.
Total government expenditure touched ₹36.9 lakh crore in the April–January period with a muted 1% spike, slightly higher than ₹35.7 lakh crore recorded last year, driven by continued spending across social sector and economic ministries.
Capital expenditure reached ₹8.4 lakh crore, rising from ₹7.6 lakh crore a year ago, underscoring the government’s emphasis on infrastructure creation and long-term asset building.
"The GoI’s capex declined by 25% YoY in January 2026, marking the fourth consecutive month of a contraction. Overall, capex recorded a 11% YoY expansion during 10M FY2026, amounting to 77% of the FY2026 RE as against 72% in the year ago period. Capex needs to contract by 14% YoY during February-March FY2026 to remain within the FY2026 RE," said Aditi Nayar, chief economist at ICRA while commenting on fiscal deficit.
"For the fiscal math, the size of the economy is modestly smaller than budgeted earlier, implying the pace of increase to reach the FY27 budgeted size will need to be stronger than the projected 10% yoy to maintain the 4.3% of GDP target," noted Radhika Rao, executive director at DBS Bank.
In the Union Budget for FY27, the Government of India had projected a fiscal deficit of 4.3% of GDP, based on what were then considered realistic expectations for revenue and expenditure.
But with the revision of the GDP dataset following the shift to a 2022–23 base year from 2011–12, nominal GDP is now estimated at around ₹380 lakh crore — roughly 10% higher year-on-year, but about 3.3% below the ₹393 lakh crore figure used in the Budget. As a result, the fiscal deficit for FY2027, on the Budget Estimates, is likely to work out closer to 4.46% of GDP, Nayar added.
