Archive · 2 Aug 2026
India Q1 Fiscal Deficit 18.2% of Target, Capex 24% YoY
India’s government spent a lot of money in the first quarter of the 2026-27 fiscal year.
The deficit, which is the gap between what the government spends and what it earns, was 18.2% of the target.
A big part of the spending was on new projects, which grew 24% from the year before.
Tax money went up, but not as fast as the government’s spending.
The government is worried that if fighting in West Asia continues and oil prices rise, the deficit could become even bigger than the planned 4.3% of the country’s total income.
The government hopes that higher economic growth and money from selling assets will help keep the deficit under control.
Fiscal deficit in Q1 FY27 was 18.2% of the target, up 0.3 percentage points from the same period last year.
Capital expenditure rose 24% YoY to Rs 3.4 lakh crore, exceeding the 11.5% budgeted growth.
Net tax revenue increased 17.8% YoY to Rs 6.4 lakh crore, while gross tax revenue grew only 3.7% due to excise duty cuts.
Total expenditure grew 11% YoY to Rs 13.6 lakh crore, with subsidies rising 37% in the quarter.
Analysts warn that renewed West Asian hostilities and higher oil prices could push the fiscal deficit above the 4.3% GDP budget target.
- Who
- Central government of India and its chief economists
- What
- Reported fiscal deficit and spending figures for Q1 FY27
- When
- April to June 2026-27
- Where
- India
- Why
- Higher capital expenditure, war‑related disruptions, and excise duty cuts
- Fiscal deficit
- 18.2% of target
- Capital expenditure
- Rs 3.4 lakh crore
- Net tax revenue
- Rs 6.4 lakh crore
- Total expenditure
- Rs 13.6 lakh crore
- Budget target deficit
- 4.3% of GDP