India’s fiscal deficit for the first nine months of the financial year 2025-26 amounted to Rs 8.55 lakh crore, representing 54.5% of the annual target set in the Budget. This figure is lower than the 56.7% recorded during the same period in the previous year. Total receipts during this period reached Rs 25.25 lakh crore, accounting for 72.2% of the yearly target, while the overall expenditure stood at Rs 33.81 lakh crore, which is 66.7% of the fiscal year’s budget target.
Net tax receipts increased to Rs 19.4 lakh crore from Rs 18.4 lakh crore collected in the corresponding period of the previous year. Non-tax revenue also saw a rise to Rs 5.4 lakh crore from Rs 4.5 lakh crore in the previous financial year. The government’s total expenditure rose to Rs 33.8 lakh crore compared to Rs 32.3 lakh crore in the same period a year earlier.
Capital expenditure, including spending on infrastructure like highways, ports, and railways, surged to Rs 7.9 lakh crore from Rs 6.9 lakh crore in the same period last year. The Finance Ministry highlighted that Rs 10,38,164 crore has been transferred to state governments as devolution of share of taxes by the Centre during this period, marking an increase of Rs 1,37,014 crore from the previous year.
Finance Minister Nirmala Sitharaman set the fiscal deficit target for 2025-26 at 4.4% of GDP, amounting to Rs 15.7 lakh crore. This move is part of the government’s strategy to reduce the deficit gradually to enhance the country’s fiscal position. A decline in the fiscal deficit strengthens the economy’s fundamentals, promoting growth with price stability and reducing government borrowing, thereby increasing funds in the banking sector for lending to corporates and consumers, ultimately fostering higher economic growth.
