India’s fiscal deficit widens to 9.6% of FY27 target in April–May

India’s Fiscal Deficit Widens to ₹1.62 Lakh Crore in April-May, Touches 9.6% of FY27 Target

The fiscal deficit, or gap between the government's expenditure and revenue, was Rs 1.62 lakh crore in value terms at the end of May 2026, data released by the Controller General of Accounts (CGA) showed.

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India’s Fiscal Deficit Rises To 9.6% Of FY27 Target In April–May

India’s fiscal deficit widened to 9.6% of the full-year target in the first two months of FY27, as government expenditure increased at a faster pace than revenue receipts, according to data released by the Controller General of Accounts (CGA) on June 30.In absolute terms, the fiscal deficit stood at ₹1.62 lakh crore during April–May, compared with the full-year Budget Estimate of ₹16.96 lakh crore. In the same period of the previous fiscal year, the deficit was significantly lower at ₹13,163 crore, or 0.8% of the annual target.The widening gap was primarily driven by higher government spending. Total expenditure during April–May stood at ₹8.81 lakh crore, accounting for 16.5% of the Budget Estimate, compared with 14.7% in the corresponding period of FY26. Within this, revenue expenditure increased to 15.3% of the annual target from 13.3% a year earlier, while capital expenditure also rose to 20.5% of the BE, slightly higher than 19.7% in the same period last year.On the revenue side, collections were marginally weaker compared to the previous year. Total receipts stood at ₹7.19 lakh crore, or 19.7% of the Budget Estimate, down from 21% a year earlier. India Likely To Miss FY27 Fiscal Deficit Target Amid Rising Oil Costs Revenue receipts came in at ₹6.99 lakh crore, representing 19.8% of the annual target versus 20.7% in the same period last year.Net tax revenue stood at ₹3.48 lakh crore, accounting for 12.1% of the Budget Estimate, slightly lower than 12.4% in the corresponding period of FY26. However, non-tax revenue provided significant support, coming in at ₹3.51 lakh crore or 52.7% of the annual target, though still below last year’s 61.2% level. This strength was largely supported by the Reserve Bank of India’s record surplus transfer of ₹2.86 lakh crore for FY26.Non-debt capital receipts remained weak at ₹19,664 crore, or 16.6% of the Budget Estimate, compared with 33.2% a year earlier. Disinvestment and other capital receipts also declined sharply to ₹13,627 crore, or 17% of the target, versus 48.1% last year.Meanwhile, the revenue deficit stood at ₹68,985 crore, while the primary deficit—excluding interest payments—was ₹19,107 crore.For FY27, the government has set a fiscal deficit target of 4.3% of GDP, slightly lower than the revised 4.4% target for FY26.

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