Business · Economy · 9 hrs ago
India’s fiscal deficit reaches 42.1% of FY27 target in first half
India’s central government recorded a ₹7.14 lakh crore fiscal deficit in April-September, equal to 42.1% of its full-year target.
The gap was larger than a year earlier, when it stood at 36.5% of that year’s target.
Higher capital spending and subsidies widened the deficit: total expenditure rose 10.7%, and major subsidies increased 10.1%.
The government aims to keep the full-year deficit at 4.3% of GDP, or ₹16.96 lakh crore.
This matters because the government has cut its planned market borrowing by nearly ₹1.2 lakh crore, while some tax receipts have grown slowly.
Economist Aditi Nayar said meeting the target may be challenging, with weaker-than-needed income tax and excise collections expected to be partly offset by customs duties.
The government needs to restrain its revenue deficit in the second half to stay on target, while elevated energy prices could push fuel and fertiliser subsidies higher.
India’s central government fiscal deficit reached ₹7.14 lakh crore in April-September 2026, equal to 42.1% of its full-year FY27 target.
The share was up from 36.5% in the same period a year earlier.
Higher capital spending and subsidy outlays contributed to the increase, while total expenditure rose 10.7% year on year.
The government’s FY27 deficit target is ₹16.96 lakh crore, or 4.3% of GDP.
Economist Aditi Nayar said meeting the target may be challenging because of the spending and revenue requirements for the second half.
- Who
- India’s central government.
- What
- Its fiscal deficit reached ₹7.14 lakh crore, or 42.1% of the FY27 target, in the first half of the fiscal year.
- When
- April-September 2026; the data were released on October 30, 2026.
- Where
- India.
- Why
- Higher capital spending and subsidy outlays contributed to the wider deficit.
This story does not have two clearly opposing sides.
The central government recorded a fiscal deficit of ₹7.14 lakh crore in the first half of FY27.
The fiscal gap was ₹4,164 crore, compared with a surplus of ₹25,030 crore a year earlier.
The government’s fiscal data were released.
- Fiscal deficit in H1 FY27
- ₹7.14 lakh crore
- Share of FY27 deficit target reached
- 42.1%
- FY27 deficit target
- ₹16.96 lakh crore, or 4.3% of GDP
- Capital expenditure in April-September
- ₹6.55 lakh crore
- Major subsidies in April-September
- ₹2.23 lakh crore
2 sources
What people are saying
The Government of India has received ₹18.35 lakh crore (50.3% of corresponding BE 2026-27 of Total Receipts) up to September, 2026
With the upsurge in first half, the government of India will need to curtail its revenue deficit in second half of FY27 relative to the levels seen in the year-ago period, in order to meet its target for the fiscal, which may prove challenging
With capex rising by 12.7% in H1 FY2027, the asking rate for H2 stands at a considerable 16.2%