Fiscal Deficit at Rs 4.68 Lakh Crore in April–July; Non-Tax Revenue Surges on RBI Dividend

India’s fiscal deficit for the first four months of the current financial year touched Rs 4.68 lakh crore, accounting for 29.9% of the full-year target, according to data released by the Controller General of Accounts on Friday. The gap widened compared with the 17.2% reported in the same period a year ago.

During April–July, the Centre’s total receipts stood at Rs 10.95 lakh crore, which is 31.3% of the budgeted estimate for FY26. Expenditure in the same period was Rs 15.63 lakh crore, or 30.9% of the target. A year earlier, receipts were at 31.9% of estimates, while expenditure was 27% of the year’s projection.

Revenue receipts amounted to Rs 10.65 lakh crore, comprising Rs 6.61 lakh crore from taxes and Rs 4.03 lakh crore from non-tax sources. Tax collections represented 23.3% of the budgeted target, lower than 27.7% achieved during the corresponding months of FY25. In contrast, non-tax revenue surged to 69.2% of the estimate, compared with 55.3% in the previous year.

A major boost to non-tax revenue came from the Reserve Bank of India’s record dividend transfer of Rs 2.69 lakh crore to the government, significantly higher than the Rs 2.11 lakh crore payout in the previous year. This transfer is expected to ease pressure on the fiscal deficit.

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The revenue deficit for the April–July period stood at Rs 1.51 lakh crore, or 3.8% of the annual target.

In her Union Budget for FY26, Finance Minister Nirmala Sitharaman pegged the fiscal deficit target at 4.4% of GDP. The projection aligns with the government’s roadmap to narrow the gap below 4.5% by FY26. For FY25, the deficit came in at 4.8% of GDP, meeting the revised estimate.

The Centre is banking on strong tax collections to achieve the lower target while continuing to prioritise capital expenditure aimed at stimulating demand, creating jobs, and supporting India’s goal of becoming the world’s third-largest economy by 2030.

On the spending side, the government allocated Rs 1.13 lakh crore towards major subsidies—including food, fertiliser, and petroleum—during April–July. This represented 30% of the revised annual allocation, slightly below the 33% recorded in the same period last year.