India keeps fiscal gap steady at 36 percent
India’s fiscal deficit for April–September stood at Rs 5.73 lakh crore, or 36.5 percent of the full-year budget estimate, according to government data released on Friday. The figure signals a well-managed fiscal position, supporting stable economic growth.
Total receipts reached Rs 17.30 lakh crore, or 49.5% of the annual target, while expenditure totaled Rs 23.03 lakh crore, or 45.5% of the budgeted amount. Revenue receipts included Rs 12.29 lakh crore in taxes and Rs 4.66 lakh crore in non-tax revenue. The latter rose sharply due to a Rs 2.69 lakh crore dividend from the Reserve Bank of India, up from Rs 2.11 lakh crore the previous year.
Spending increased from Rs 21.1 lakh crore in the same period last year, driven by infrastructure outlays in highways, ports, and railways. These investments aim to sustain growth amid global uncertainties, including shifts in U.S. tariffs and geopolitical tensions.
The government has set its fiscal deficit target at 4.9 percent of GDP for FY26, down from 5.6 percent in FY25. A narrowing deficit strengthens economic fundamentals, reduces borrowing pressure, and frees up banking resources for private lending. A Bank of Baroda report noted this fiscal strength may also provide room for unexpected defense spending, especially after recent tensions with Pakistan following the Pahalgam terror attack and Operation Sindoor.
