The central government's fiscal deficit reached Rs 12.52 lakh crore at the end of February, or 80.4 per cent of the 2025-26 budget target, down from 85.8 per cent in the same period last year, according to government data released on Monday.
The Centre estimates the fiscal deficit, the gap between expenditure and revenue, at 4.4 per cent of GDP, or Rs 15.58 lakh crore for 2025-26.
Data from the Controller General of Accounts (CGA) shows total receipts at Rs 27.91 lakh crore by February-end, or 82 per cent of the budget target. Tax revenue (net) contributed Rs 21.45 lakh crore, while non-tax revenue stood at Rs 5.8 lakh crore.
The CGA said Rs 12.66 lakh crore was transferred to states as part of tax devolution, Rs 85,837 crore higher than the previous year.
Central government expenditure from April to February 2025-26 stood at Rs 40.44 lakh crore, or 81.5 per cent of the full-year budget estimate.
Revenue spending was Rs 31.15 lakh crore, with Rs 10.65 lakh crore going to interest payments and Rs 3.89 lakh crore to major subsidies. Capital expenditure was Rs 9.29 lakh crore.
Commenting on the data, Aditi Nayar, ICRA chief economist, said, “The Government of India's fiscal deficit narrowed to Rs 12.5 lakh crore or 80.4 per cent of the 2025-26 revised budget estimates from Rs 13.5 lakh crore in the year ago period, led by a lower revenue deficit, even as capex was 15 per cent higher.”
She added, “The cut in excise duty on fuels is expected to result in a revenue loss of about Rs 1-1.2 lakh crore in FY2027, equivalent to about 30 basis points as a proportion of GDP. However, this is likely to be partly offset by the amount allocated towards the Economic Stabilisation Fund (ESF).”
Nayar also noted, “Nevertheless, the West Asia crisis has complicated the GoI’s budget math for FY2027, raising material risks on the expenditure and revenue side, especially if the conflict persists for a prolonged period, keeping crude oil and natural gas prices elevated, beyond our current baseline forecasts.”