India’s fiscal deficit hits 41.9% of FY27 target by August

India's fiscal deficit stood at Rs 7.1 lakh crore, or 41.9% of the full-year Budget Estimates for 2026-27, by the end of August, according to data released by the Controller General of Accounts (CGA) on Wednesday, 30 September. The deficit was 38.1% of the Budget Estimates in the same period last year. The Centre's net tax revenue stood at Rs 8.38 lakh crore, or 29.2% of the BE, up from 28.6% a year ago.

Capital expenditure grew 18.2% during April-August 2026, The Hindu Business Line reported, citing CGA data. Subsidy spending rose to Rs 1.87 lakh crore, or 46% of the annual allocation, up from 39% last year, Mint reported. Madan Sabnavis of Bank of Baroda told multiple outlets that the fiscal deficit ratio should be contained at 4.5 to 4.6% this year, while DK Srivastava of EY India said the government is on course for its 4.3% of GDP target. The government has cut its FY27 market borrowing by nearly Rs 1.2 lakh crore, Mint reported.

The Centre has set a fiscal deficit target of 4.3% of GDP, or Rs 16.96 lakh crore, for 2026-27. A Dolat Capital report, cited by the Economic Times, said the fiscal outcome will depend heavily on direct tax collections as lower customs duties and weaker excise revenues could constrain indirect tax receipts.

Update, 2 October 2026: The Economic Times, citing a Dolat Capital report, added on Thursday, 1 October, that the fiscal outcome will depend heavily on direct tax collections as lower customs duties and weaker excise revenues could constrain indirect tax receipts. Morung Express confirmed the CGA data on 30 September, adding that the government will borrow Rs 7.86 lakh crore in the second half of the fiscal.