India’s Fiscal Deficit Hits ₹9.8 Trillion, 63% of FY26 Target by January: CGA

India’s fiscal deficit stood at ₹9.8 trillion or 63% of the full year target, at the end of January 2026. This data are according to data released by the Controller General of Accounts (CGA). This marks an improvement compared to 74.5% utilisation recorded during the same period last year, indicating relatively better fiscal management in FY 2025-26.

Fiscal Deficit Target for 2025-26

The Centre has projected a fiscal deficit of 4.4% of GDP for the financial year 2025-26. In absolute terms, this translates to ₹15.58 trillion.

What is Fiscal Deficit?

• Fiscal deficit refers to the gap between the government’s total expenditure and total revenue (excluding borrowings).
• It reflects how much the government needs to borrow to meet its spending commitments.

Government Receipts Up to January 2026

As per CGA data, total receipts of the Centre stood at ₹27.08 trillion, which is 79.5% of the Revised Estimate (RE) 2025-26.

Break-up of Receipts

• Tax Revenue (Net to Centre): ₹20.94 trillion
• Non-Tax Revenue: ₹5.57 trillion
• Non-Debt Capital Receipts: ₹57,129 crore

Strong tax collections have supported fiscal consolidation efforts, helping contain the fiscal deficit at 63% of the annual target.

Tax Devolution to States

• The Centre transferred ₹11.39 trillion to state governments as their share of taxes.
• This is ₹65,588 crore higher than the previous year which is reflecting continued fiscal support to states amid infrastructure and welfare spending needs.

Government Expenditure Trends

Total expenditure incurred by the Government of India up to January 2026 stood at ₹36.9 trillion, which is 74.3% of the Revised Estimate for FY26.

Expenditure Breakdown

• Revenue Expenditure: ₹28.47 trillion
• Capital Expenditure: ₹8.42 trillion

Revenue expenditure includes routine expenses such as salaries, subsidies, and interest payments, while capital expenditure is directed toward infrastructure and asset creation.

Interest Payments and Subsidy Burden

From the total revenue expenditure,

• Interest Payments: ₹9.88 trillion
• Major Subsidies: ₹3.54 trillion

Interest payments remain one of the largest components of government spending, highlighting the importance of fiscal discipline and debt management.

Fiscal Deficit at 63%: What It Signals

The fiscal deficit at 63% of the annual target suggests,

• Improved revenue realization compared to last year
• Controlled expenditure growth
• Progress toward the 4.4% of GDP fiscal deficit target

However, the final quarter (February-March) typically sees higher expenditure due to accelerated spending on capital projects and subsidy clearances.

Question

Q. India’s fiscal deficit target for FY 2025-26 is set at what percentage of GDP?

A) 3.5%
B) 4.0%
C) 4.4%
D) 5.0%