India's fiscal deficit from April to November 2025 stood at ₹9.76 trillion or 62.3% of the budget estimate for 2025-26, showed data from the Controller General of Accounts (CGA).
Total receipts stood at ₹19.49 trillion, including revenue receipts of ₹19.10 trillion, while the government has spent ₹29.25 trillion.
In the previous fiscal, the deficit was lower at ₹8.5 trillion or 52.5% of the budget estimate in the same period.
Better-than-expected non-tax revenue collection of ₹5.16 trillion, or 88.6% of the full-year budget estimate, was achieved in the first eight months of FY26, cushioning the central government's finances. This was higher than the ₹4.27 trillion collected in the year-ago period.
Further, the Centre's fiscal position is supported by better-than-expected dividend payouts by public sector undertakings, state-run banks, and the Reserve Bank of India. The total dividend received by the Centre during the period was ₹3.39 trillion, or 104% of the budget estimate of ₹3.25 trillion.
However, tax revenue collection stood at ₹13.9 trillion, or just 49% of the full-year estimate, lower than the ₹14.43 trillion collected in April-November last year.
Revenue from customs duty, goods and services tax (GST), compensation cess, and securities transaction tax (STT) declined in the period from a year ago.
Tax rebate, high capex impact
Experts suggest that tax revenues have been impacted by the income-tax rebate announced in the February budget, effectively reducing the tax liability to zero for citizens earning up to ₹12 lakh per year and the impact of the GST rationalization on indirect tax collections. Further, a 28% increase in capex also resulted in the widening of the deficit.
"While net tax revenues contracted by 3.4% during this period, non-tax revenues expanded by 20.8% and revenue expenditure rose by a muted 1.8%, keeping the revenue deficit in check. We now anticipate a shortfall of ₹1.5 trillion in the Government of India's gross tax revenues in the current fiscal relative to the FY26 budget estimate," said Aditi Nayar, chief economist, Icra Ltd.
She, however, noted that the Centre's capex contracted for the second consecutive month in November 2025, thereby declining by 21% in October-November after having expanded by 31% in the September quarter.
Capex recorded a healthy rise of 28% annually during the April-November period, amounting to 59% of the 2025-26 budget estimate as against 49% in the year-ago period.
The central government's spending on all subsidies amounted to ₹2.88 trillion in the period, reaching 75% of the annual target, compared to ₹2.79 trillion spent during the same period of the previous fiscal.
While the outgo on food subsidy declined to ₹1.37 trillion during the period, compared to ₹1.51 trillion a year ago, the outgo on nutrient-based fertilizers, urea, and petroleum subsidies rose to ₹46,377 crore (up 24% year-on-year), ₹96,027 crore (up 14.19%), and ₹8,628 crore (up 41.85%), respectively.
As announced by finance minister Nirmala Sitharaman in the Union budget in February 2025, the Centre has estimated a fiscal deficit of ₹15.69 trillion or 4.4% of the gross domestic product (GDP) for the full year 2025-26.
The previous fiscal ended with a fiscal deficit of 4.8%, which was lower than the revised estimates of 4.9%.
source: Mint
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