India’s Fiscal Deficit Reaches ₹7.14 Trillion in April–September FY27, 42.1% of Annual Target

The central government’s fiscal deficit rose to INR 7.14 Trillion in April-September, 2026, which is around 42.1% of the total target for FY26-27. This increased from INR 5.7 Trillion in April-September, FY26, due to higher government spending and capital expenditure. However, net tax receipts were INR 12.76 Trillion and the Center maintained its fiscal deficit target to 4.3% of GDP.

India’s Fiscal Deficit at 42.1% of FY27 Target

The Center’s fiscal deficit rose to INR 7.14 Trillion in the first half of FY27, which is 42.1% of the total Budget Estimate for the year.

The Centre’s fiscal deficit was INR 5.7 Trillion in April-September FY26, which was 36.5% of the total target for FY26.

This shows that there was a higher shortfall in the Center’s expenditure and non-borrowed receipts.

The Centre has targeted a 4.3% fiscal deficit for FY27, which is around INR 16.96 trillion.

Indicators	April-September FY26	April-September FY27
Fiscal Deficit	INR 5.7 Trillion	INR 7.14 Trillion
Fiscal deficit (as % of annual target)	36.5%	42.1%
Net Tax Receipts	INR 12.3 Trillion	INR 12.76 Trillion
Total Government Expenditure	INR 23 Trillion	INR 25.5 Trillion
Capital Expenditure	INR 5.8 Trillion	INR 6.5 Trillion

Centre’s Revenue Receipts in April-September FY27

The Centre receives two types of revenue; tax and non-tax revenue. These help fund government expenditure.

1. Net Tax Receipts

• Net tax receipts were INR 12.76 Trillion in April-September FY27, which was 44.5% of the total Budget Estimate.
• This increased from INR 12.3 Trillion in April-September FY26, which was 43.3% of the Budget Estimate.
• Net tax receipts are when the Center subtracts the portion of taxes payable by the States from their tax collection.

2. Non-Tax Revenue

• The Center’s non-tax revenue increased to INR 4.8 Trillion in the first half of FY27, from INR 4.7 Trillion in April-September FY26.
• Non-tax revenue relates to any income that isn’t derived from taxes. Such as dividends and profit from public sector companies, interest, fees and charges.

Higher Government Expenditure and Capital Expenditure

The total government expenditure was INR 25.5 Trillion in April-September FY27, which is 47.7% of the Budget Estimate.

This increased from INR 23 Trillion in the first half of FY26.

Capital expenditure increased to INR 6.5 trillion in the first half of FY27, up from INR 5.8 trillion the previous year.

What Is Fiscal Deficit ?

The Fiscal Deficit is the difference between the Total Government Expenditure and the Total Government Receipts (excluding borrowings).

It shows how much the government has to borrow to meet its expenditure.

Fiscal Deficit = Total Expenditure – Total Receipts (excluding borrowings)

A fiscal deficit occurs when government expenditure is higher than non-borrowed receipts.

Suppose the government spends ₹100 and earns only ₹80 by way of taxes and other non-borrowings, then the fiscal deficit will be ₹20. This gap is generally met by borrowing.