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India's fiscal deficit widens to 18.2% of FY27 target by June as spending picks up

Published August 1, 2026 at 12:33 AM UTC

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India's fiscal deficit for the first quarter of the 2026-27 financial year has reached ₹2.81 trillion, accounting for 18.2% of the full-year target. This marks a significant increase from ₹1.36 trillion in the same period last year. The rise is primarily due to a surge in government spending, particularly in capital expenditure, which rose to ₹2.5 trillion from ₹2.2 trillion a year earlier. This spending is aimed at bolstering infrastructure and stimulating economic growth. However, total receipts have declined by 2% to ₹7.2 trillion, with net tax revenues remaining unchanged at ₹3.5 trillion. The government has set a fiscal deficit target of 4.3% of GDP, or ₹16.96 trillion, for the entire fiscal year.