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India’s First-Half FY26 Fiscal Gap Rises to 36.5% of Target on Front-Loaded Capex

A record central bank dividend helped offset softer tax receipts during a first-half acceleration in public investment.

Overview

  • The fiscal deficit reached ₹5.73 trillion in April–September, according to CGA data, compared with about 29% of the target a year earlier.
  • Budgetary capital expenditure jumped roughly 40% year on year to about ₹5.8 lakh crore, taking 51.8% of the full-year capex outlay.
  • Net tax revenue was ₹12.29 trillion, or 43.3% of the annual goal, trailing last year’s 49% pace amid weaker direct-tax momentum and higher devolution to states.
  • Non-tax receipts rose sharply to ₹4.66 trillion, supported by a record ₹2.56 trillion dividend from the Reserve Bank of India.
  • New Delhi is still aiming for a full-year deficit of 4.4% of GDP, with economists pointing to second-half revenue traction, expenditure savings and asset monetisation plans, alongside risks from global oil and financing costs.