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India’s Fiscal Deficit Reaches 26.8% of FY27 Target

India’s Fiscal Deficit Reaches 26.8% of FY27 Target
Fiscal deficit at 26.8% of annual target in April-July · financialexpress.com

The Indian government keeps track of how much money it spends compared with how much it receives.

During the first four months of FY27, its fiscal deficit used 26.8% of the amount planned for the whole year.

This was lower than the 29.9% used during the same period a year earlier.

Tax collections grew strongly, helping control the deficit.

The government also increased spending on building projects and other capital investments by 30%.

Gross tax revenue grew by 11%, with direct taxes and customs duties making important contributions.

Customs collections benefited from higher duties on gold and silver.

Experts said tax revenue will still need to grow during the rest of the year to meet the government’s budget goal.

A cut in petrol and diesel duties could make that target harder to achieve.

Key facts

Fiscal deficit share
26.8% of the FY27 annual target during April-July
Previous-year comparison
29.9% of the annual target during April-July FY26
Net tax collections
Rose 27.6% during April-July FY27
Gross tax revenues
Rose 11% year on year during April-July 2026
Capital expenditure
Increased 30% year on year during April-July
FY27 gross tax target
Rs. 44.0 trillion
Required remaining revenue growth
Gross tax revenues need to grow 8.7% year on year during the remaining eight months of FY27

Quotes

Aditi Nayar

Chief economist at rating agency ICRA

“Based on the FY2027 BE and the provisional 4M trends, the GoI’s GTR needs to expand by 8.7% YoY in the remaining eight months of FY2027 to achieve the budgeted target of Rs. 44.0 trillion for the fiscal,”
financialexpress.com
“With two tranches being shared in August 2026 vs. one in August 2025, the pace of growth will normalise and come closer to that of gross tax revenues,‌”
financialexpress.com

Sources

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