India's fiscal deficit in April-May at 9.6 pc of full year target: Govt
New Delhi, June 30
India's fiscal deficit stood at Rs 1.624 lakh crore in April-May of financial year 2026-27, which accounts for 9.6 per cent of the full-year target, data released by the Controller General of Accounts showed on Tuesday.
The government has fixed a fiscal deficit target of Rs 16.96 lakh crore for the full financial year (FY27), which shows that the figures for the first two months reflect a strong fiscal position with the country on track to meet the target set in the Budget for 2026-27.
In the corresponding period of FY26, the fiscal deficit stood at Rs 13,163 crore, or 0.8 per cent of the full-year target.
The Government recorded a fiscal surplus of Rs 2 lakh crore in May, compared with a surplus of Rs 1.73 lakh crore in May last year. In April, the government had reported total receipts of Rs 2.13 lakh crore and total expenditure of Rs 5.75 lakh crore, which left a fiscal deficit of around Rs 3.62 lakh crore for the first month of the financial year, according to the monthly data.
Non-tax revenue stood at Rs 3.27 lakh crore in May, compared with Rs 2.90 lakh crore in the same month last year. The May number came after the Reserve Bank of India's Central Board approved a surplus transfer of Rs 2.87 lakh crore to the central government for FY26.
Capital expenditure in May stood at Rs 61,200 crore, compared with Rs 61,600 crore in the same month of the previous year. For April-May, however, capital expenditure rose to Rs 2.51 lakh crore from Rs 2.21 lakh crore a year earlier.
Gross tax revenue for April-May stood at Rs 5.25 lakh crore, compared with Rs 5.15 lakh crore in the same period last year, the data showed.
The Government achieved its fiscal deficit target of 4.4 per cent in the financial year 2025-26 and has lowered the target further to 4.3 per cent of GDP for the current financial year as part of the fiscal consolidation process.
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
Reader Comments
I'm skeptical about these figures. The comparison with last year's 0.8% deficit in April-May feels misleading because that was an abnormally low base. Let's see how the numbers look when we compare with pre-pandemic trends. Also, capital expenditure growth is barely 13% - doesn't feel like the 'massive infrastructure push' we keep hearing about.
The RBI surplus transfer of Rs 2.87 lakh crore is doing the heavy lifting here. Without that windfall, the deficit picture would look very different. While it's great for the government's books, it's essentially just one PTO (public sector entity) transferring money to another. Real fiscal health will be tested when we account for state government deficits too.
As a taxpayer, I'm happy seeing fiscal consolidation but worried about spending on social sectors. Healthcare and education budgets haven't seen the same disciplined growth. The article mentions lower borrowing leaving more funds for corporate lending - what about funding for public schools and primary health centres? Growth needs inclusive development, yaar.
Interesting data points. The jump from 0.8% deficit last year to 9.6% this year in the same two-month window is dramatic but understandable given different base effects and the massive RBI dividend. India's fiscal consolidation story remains intact though - achieving 4.4% deficit last year was impressive. Curious to see how monsoon revenues and potential election year spending affect the trajectory.
Meanwhile, my state government is running deficits just to pay salaries and pensions! Centre's fiscal consolidation is good, but 60% of states are struggling with
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.