India’s Fiscal Deficit Touches 54.5 Per Cent Of Full-Year Target In April–December Period

New Delhi, Jan 30: India’s fiscal deficit for the first nine months (April–December) 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.

Receipts and expenditure performance

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 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.

Tax and non-tax revenue growth

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

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

Higher government spending

Total government expenditure increased to Rs 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, rose sharply 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 major projects to boost growth and employment in the economy.

Higher tax devolution to states

A sum of Rs 10,38,164 crore was 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.

Fiscal consolidation path

Finance Minister Nirmala Sitharaman set the fiscal deficit target in the Budget for 2025–26 at 4.4 per cent of GDP, amounting to Rs 15.7 lakh crore. This forms part of the government’s commitment to follow a descending glide 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 per the revised estimate.

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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 government borrowing, leaving more funds in the banking sector for lending to corporates and consumers, thereby supporting higher economic growth.

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