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India's Fiscal Deficit at 54.5% of Target, Shows Improvement Over Last Year

India's fiscal deficit for the first nine months of the financial year reached Rs 8.55 lakh crore, constituting 54.5% of the full-year budget target, an improvement from 56.7% in the same period last year. Total receipts stood at 72.2% of the annual estimate, while expenditure was at 66.7% of the target. Capital expenditure saw a significant rise to Rs 7.9 lakh crore as the government focused on infrastructure projects to boost growth. Finance Minister Nirmala Sitharaman has set the fiscal deficit target for 2025-26 at 4.4% of GDP as part of a commitment to fiscal consolidation.

Key Points: India's Fiscal Deficit at 54.5% of Full-Year Target

  • Deficit at 54.5% of FY target
  • Lower than 56.7% last year
  • Capex surges to Rs 7.9 lakh crore
  • Tax devolution to states rises
3 min read

India's fiscal deficit in April-December touches 54.5 per cent of full year target

India's fiscal deficit for April-December stands at Rs 8.55 lakh crore, or 54.5% of the annual target, showing improvement from the previous year.

"A decline in the fiscal deficit strengthens the fundamentals of the economy and paves the way for growth with price stability."

New Delhi, Jan 30

India's fiscal deficit for the first nine months of the financial year 2025-26 stood at Rs 8.55 lakh crore, which works out to 54.5 per cent of the annual target set in the Budget for the full financial year, according to data released by the Finance Ministry on Friday.

The fiscal deficit is lower than the corresponding figure of 56.7 per cent recorded in the same period of the previous year.

Total receipts during the first nine months of the current financial year stood at Rs 25.25 lakh crore, which constitutes 72.2 per cent of the target for the full year, while overall expenditure in April to December was at Rs 33.81 lakh crore, which is 66.7 per cent of this fiscal year's budget target.

Total receipts in the same period of the previous year were 72.3 per cent of the targeted estimate, while expenditure was 67 per cent.

Net tax receipts at Rs 19.4 lakh crore, up ⁠from Rs 18.4 lakh crore collected in the same period a year ago.

Non-tax revenue went up to Rs 5.4 lakh crore, from Rs 4.5 lakh crore in the same period of the previous financial year.

Total government expenditure rose to 33.8 lakh crore compared with Rs 32.3 lakh crore in the same period a year earlier.

Capital expenditure, or ⁠spending on infrastructure such as highways, ports and railways, shot up to Rs 7.9 lakh crore from Rs ⁠6.9 lakh crore in the same period last year as the government continued its focus on these big projects to boost growth and employment in the economy.

A sum of Rs 10,38,164 crore has been transferred to state governments as devolution of share of taxes by the Centre during this period, which is Rs 1,37,014 crore higher than the previous year, the Finance Ministry added.

Finance Minister Nirmala Sitharaman set the fiscal deficit target in the budget for 2025-26 at 4.4 per cent of GDP, which works out to Rs 15.7 lakh crore. This is part of the government's commitment to follow a descending gliding path on the deficit to strengthen the country's fiscal position. India's fiscal deficit for 2024-25 stood at 4.8 per cent of GDP as part of the revised estimate.

A decline in the fiscal deficit strengthens the fundamentals of the economy and paves the way for growth with price stability. It leads to a reduction in borrowing by the government, thus leaving more funds in the banking sector for lending to corporates and consumers, which leads to higher economic growth.

- IANS

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Reader Comments

P
Priyanka N
Rs 8.55 lakh crore deficit... these numbers are mind-boggling. While the government is spending on infrastructure, I worry about the burden on future generations. Are we sure this borrowing is sustainable? The tax receipts are up, which is positive, but the overall debt picture needs clarity.
A
Aman W
The focus on capex is the right strategy. Building ports, railways, and highways creates assets for the nation, not just consumption. The higher devolution to states (Rs 1.37 lakh crore more!) is also good for balanced regional development. Thumbs up from me. 👍
S
Sarah B
As someone following global economies, it's impressive to see India sticking to its gliding path target of 4.4%. Many developed nations are running much higher deficits. The reduction, even if marginal year-on-year, signals credibility to international investors.
K
Karthik V
With respect, I have to offer a criticism. The article says lower deficit paves the way for price stability, but as a common citizen, I'm not feeling it. Vegetable prices are still through the roof. Maybe the benefits need to percolate down faster? The numbers look good on paper, though.
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Nisha Z
Non-tax revenue up by almost Rs 1 lakh crore! That's a significant jump. Hope this is from strategic asset sales and not just one-off items. The discipline shown in the first three quarters needs to continue in Q4. Let's see if they meet the annual target.

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