India fiscal deficit stood at Rs 7.14 lakh crore in April to September 2026, the first six months of financial year 2027, accounting for 42.1 per cent of the full year Budget Estimate. Government data released on 30 October by the Controller General of Accounts showed the gap between spending and receipts, excluding borrowings, against a full year target of Rs 16.96 lakh crore. In the same period last year, the fiscal deficit had used up 36.5 per cent of the annual estimate.
The fiscal deficit is the difference between total government expenditure and total receipts, excluding borrowings. It shows how much the government must borrow to meet its spending plans. Total expenditure in the first half of FY27 was Rs 25.5 lakh crore, or 47.7 per cent of the annual Budget Estimate, compared with 45.5 per cent in the same period last year. Total receipts were Rs 18.35 lakh crore.
Net tax revenue was Rs 12.76 lakh crore, or 44.5 per cent of the budget estimate for the year. Revenue receipts stood at Rs 17.57 lakh crore, or 49.7 per cent of the budget estimate. The Controller General of Accounts said the figures are provisional and unaudited, and that timing differences in receipts and spending can affect monthly accounts.
The government has set a fiscal deficit target of 4.3 per cent of GDP for 2026-27, lower than the 4.4 per cent achieved in 2025-26. That target forms part of a fiscal consolidation path, under which the fiscal deficit is brought down as a share of GDP over time. The first half figures alone do not decide whether the full year target will be met.
How the fiscal deficit widened in H1
In absolute terms, the fiscal deficit was Rs 7,14,413 crore at the end of September 2026, up by about 25 per cent from the same period last year. The rise reflects spending growing faster than receipts in the first half, even though receipts also rose. A year earlier, the fiscal deficit in April to September was Rs 5.7 lakh crore, according to Reuters reporting of the data.
Capital expenditure grew during the period. Spending on capital projects was more than Rs 6.54 lakh crore in April to September, up 12 per cent from more than Rs 5.80 lakh crore in the same period last year, and more than 53 per cent of the Budget Estimate. Capital spending covers roads, railways, defence equipment and other long lived assets, and the government has used it as a way to support activity.
Monthly movements inside the half year were uneven. Aditi Nayar, chief economist at ICRA, was reported as saying capital expenditure declined by 3 per cent in September from a year earlier, after contracting by 30 per cent in August. That pattern shows how lumpy project spending can be from month to month, even when the six month total rises.
Subsidy spending also weighed on the accounts. The Hindu BusinessLine reported that subsidy on urea had touched more than Rs 85,000 crore in six months, or 73 per cent of the budget estimate, while nutrient based subsidy reached more than Rs 33,600 crore, or nearly 62 per cent of the estimate. Food, fertiliser and petroleum subsidies together were reported at Rs 6.55 lakh crore in some accounts of the data.
Fiscal deficit target and borrowing outlook
The Controller General of Accounts cautioned that figures reported during a financial year may not indicate the final deficit for the year. Receipts often arrive later in the year, while some spending is front loaded, so the share of the target used by September can overstate or understate the final outcome. That timing point matters when reading the 42.1 per cent figure.
Analysts quoted in reporting of the data pointed to a possible modest slippage from the target. ICRA analysis reported by The Hindu BusinessLine pointed to a slippage of Rs 1.3 lakh crore to Rs 1.4 lakh crore relative to the FY27 target, if current trends continued. That is an analyst estimate, not a government forecast, and it will change as later monthly data arrive.
What the H1 fiscal deficit means
The government will publish monthly accounts again for October, and those figures will show whether the first half pattern held or eased. The full year target of 4.3 per cent of GDP, or Rs 16.96 lakh crore, remains the benchmark against which later releases will be judged. The September data put the deficit at Rs 7.14 lakh crore, or 42.1 per cent of that benchmark, with six months of the financial year still to run.