India’s fiscal deficit holds at 4.4% of GDP in FY26, meets revised estimate; revenues and spending both climb

India's fiscal deficit for FY26 stood at 4.4 per cent of gross domestic product (GDP), matching the revised estimate set by the government, according to official data released on Monday.

In value terms, the fiscal deficit was Rs 15.19 lakh crore, accounting for 97.5 per cent of the revised annual target for the financial year ended March 31, 2026.

The fiscal deficit is the difference between the government's total expenditure and total receipts, excluding borrowings.

Revenue deficit comes in at 1.55 per cent of GDP

The revenue deficit was recorded at 1.55 per cent of GDP during FY26.

Revenue deficit refers to the gap between the government's revenue expenditure and revenue receipts. The latest figure indicates that a larger portion of government borrowing continued to be directed towards capital expenditure rather than routine spending.

Tax collections, non-tax revenues increase

Government receipts showed growth during the year.

Net tax revenue rose to Rs 33 lakh crore in FY26 from Rs 30.87 lakh crore in the previous financial year.

Non-tax revenue stood at Rs 6.8 lakh crore, compared with Rs 5.31 lakh crore in FY25.

The increase in revenue collections helped support expenditure requirements during the year.

Government spending rises to Rs 49 lakh crore

Total expenditure for FY26 was recorded at Rs 49 lakh crore, up from Rs 47.16 lakh crore in FY25.

The increase came as the Centre continued spending on infrastructure projects and other development programmes during the year.

April fiscal deficit at 21.4 per cent of FY27 estimate

Separately, government accounts showed that the fiscal deficit in April, the first month of FY27, stood at 21.4 per cent of the full-year Budget Estimate.

Monthly fiscal deficit figures are influenced by the timing of expenditure and revenue receipts and are typically not indicative of the full-year outcome.

FY27 target remains lower fiscal deficit

For FY27, the government has budgeted a further reduction in the fiscal deficit while continuing to allocate resources towards infrastructure and growth-oriented expenditure.

The FY26 numbers show that the Centre closed the year within its revised fiscal deficit target while recording higher tax and non-tax revenues and an increase in overall expenditure.