India’s fiscal deficit for April–September FY26 stood at 36.5% of the full-year target, higher than 29.4% in the same period last year, mainly due to strong capital expenditure and higher tax devolution to states despite muted tax growth.

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•  Fiscal deficit reached 36.5% of FY26 target vs 29.4% in H1FY25
•  Capex surged 40%, using 51.8% of ₹11.2 trillion annual target
•  Revenue expenditure at 43.7% of target, slightly lower than last year’s 45.7%
•  States received ₹8.3 trillion in tax devolution, up 15.5% year-on-year
•  Gross tax revenue up only 2.8%; income tax +4.7%, corporate tax +1.1%
•  Indirect tax growth modest at 3.2%; Customs down 5.2%, GST/excise up 4.8%
•  Net tax revenue fell 2.8%, achieving 43.3% of full-year target vs 49% last year
•  Non-tax revenue jumped 30.5%, driven by ₹2.7 trillion RBI dividend
•  Total revenue receipts up 4.5%, covering 49.6% of FY26 target
•  Govt confident of meeting 4.4% fiscal deficit-to-GDP target despite weak tax growth
•  Economists expect higher non-tax revenue and expenditure savings to offset tax shortfall