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India's Fiscal Deficit Widens as Capex, Subsidies Rise
The government spends money on things such as roads, fertilizers, food programs, and other services.
In the first five months of FY27, it spent more than it collected.
This caused its fiscal deficit, or spending gap, to reach ₹7.10 trillion.
That amount was 41.9% of the full-year deficit limit.
Spending on building projects increased compared with the same period last year.
Subsidy spending also used a larger share of its yearly budget.
The government still aims to keep the full-year deficit at 4.3% of GDP.
It expects stronger tax and other income later in the year to help meet that goal.
The gap is mainly being financed through borrowing within India.
India's fiscal deficit reached ₹7.10 trillion during April-August of FY27, equal to 41.9% of the annual target.
Total expenditure reached ₹20.78 trillion, while total receipts stood at ₹13.68 trillion by August.
Capital expenditure rose to ₹5.10 trillion, or 41.7% of the full-year allocation, compared with 38.5% a year earlier.
Major subsidy spending reached ₹1.87 trillion, including ₹77,522 crore on urea and ₹83,510 crore on food subsidies.
The government plans to borrow ₹15.995 trillion through dated securities in FY27, below the ₹17.2 trillion budget estimate.
- Who
- The Government of India, as reflected in accounts compiled by the Controller General of Accounts.
- What
- The fiscal deficit widened to ₹7.10 trillion in the first five months of FY27 as capital expenditure and major subsidy spending increased.
- Where
- India's central government finances.
- When
- During April-August of FY27; the latest accounts were released on Wednesday.
- Why
- Capital spending and food and fertilizer subsidies increased, while the government is relying on stronger tax collections and non-tax revenue later in the year to meet its deficit target.
Key facts
- Fiscal deficit
- ₹7.10 trillion, or 41.9% of the FY27 full-year target, by August.
- Full-year deficit target
- ₹16.96 trillion, equivalent to 4.3% of GDP.
- Total expenditure
- ₹20.78 trillion, or 38.9% of the annual budget estimate.
- Total receipts
- ₹13.68 trillion, or 37.5% of the annual estimate.
- Capital expenditure
- ₹5.10 trillion, or 41.7% of the ₹12.22 trillion annual allocation.
- Major subsidies
- ₹1.87 trillion, or 46% of the ₹4.11 trillion annual allocation.
- Planned market borrowing
- ₹15.995 trillion through dated securities in FY27, including ₹7.86 trillion in the second half.
Sources
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