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India’s Fiscal Deficit Hits 29.9% of FY26 Goal by July on Faster Spending

A one-off RBI dividend boosted revenues, highlighting reliance on non-tax income.

A man speaks on his mobile phone next to an installation of the Rupee logo and Indian currency coins outside the Reserve Bank of India (RBI) headquarters in Mumbai, India, August 1, 2025. REUTERS/Hemanshi Kamani/File Photo
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Overview

  • The fiscal gap for April–July reached Rs 4.68 lakh crore, equal to 29.9% of the full-year estimate, widening from 17.2% in the same period last year.
  • Total receipts were Rs 10.95 lakh crore, or 31.3% of the budget target, against expenditure of Rs 15.63 lakh crore, or 30.9%.
  • Tax revenue stood at Rs 6.61 lakh crore, 23.3% of the budgeted amount, while non-tax revenue was Rs 4.03 lakh crore, 69.2% of the target, aided by the RBI’s Rs 2.69 lakh crore dividend.
  • Capital expenditure rose to Rs 3.46 lakh crore from Rs 2.61 lakh crore a year earlier, reflecting the government’s investment push.
  • Major subsidies cost about Rs 1.13 lakh crore, roughly 30% of the annual plan, and the revenue deficit was Rs 1.51 lakh crore or 3.8% of the yearly target, as the government pursues a 4.4% of GDP deficit for FY26.