India’s Fiscal Deficit Reaches 18.2% of FY27 Target by June End

India’s fiscal deficit reached 18.2% of its FY27 target by June, while revenue growth remained broadly aligned with budget estimates

India’s fiscal deficit stood at ₹3.08 trillion at the end of June, accounting for 18.2% of the full-year Budget Estimate (BE) for FY27, according to the latest monthly accounts released by the Controller General of Accounts (CGA). The figure was marginally higher than 17.9% recorded during the corresponding period of the previous financial year.

The fiscal deficit nearly doubled from 9.6% recorded at the end of May, reflecting higher government expenditure towards the close of the first quarter even as revenue collections remained broadly aligned with budget expectations. For FY27, the Centre has targeted a fiscal deficit of ₹16.96 trillion, equivalent to 4.3% of the country’s Gross Domestic Product (GDP).

The government’s fiscal position received a significant boost from the Reserve Bank of India’s record dividend of ₹2.87 trillion, alongside improved revenue mobilisation and front-loaded expenditure. These factors are expected to support fiscal management during the remainder of the financial year.

According to the monthly accounts, the Centre’s total receipts during the April–June quarter stood at ₹10.49 trillion, including ₹6.37 trillion in net tax revenue, ₹3.78 trillion in non-tax revenue and ₹35,003 crore in non-debt capital receipts.

Total receipts represented 28.7% of the Budget Estimate for FY27 and registered an 11.5% increase compared with the first quarter of FY26. Net tax revenue recorded a strong 17.8% year-on-year growth, while non-tax revenue increased by 1.2% during the same period.

Fiscal experts generally advise against drawing broad conclusions from first-quarter fiscal data, as direct tax collections, Goods and Services Tax (GST) settlements, dividends from the Reserve Bank of India and public sector enterprises, and other government revenues are unevenly distributed across the financial year.

The government expects stronger tax collections and non-tax revenues in the coming months to remain on course for achieving the fiscal deficit target of 4.3% of GDP by the end of FY27. Maintaining fiscal discipline while sustaining public expenditure will remain a key focus as the economy navigates domestic growth priorities and global economic uncertainties.