India meets FY26 fiscal deficit goal at 4.4% of GDP despite revenue and global pressures

New Delhi: The central government contained its FY26 fiscal deficit at the budgeted target of 4.4% of gross domestic product (GDP), despite a downward revision of the GDP size under the new series, through prudent expenditure, showed the official data released on Monday.

In absolute terms, the fiscal deficit last financial year stood at ₹15.19 lakh crore, against the revised estimate of ₹15.58 lakh crore.

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"This shows the government's commitment to fiscal discipline despite the global headwinds, such as the Iran war," a senior official told ET.

Net tax receipts touched ₹26.23 lakh crore last fiscal, or 98.1% of the target, while non-tax revenue touched ₹6.79 lakh crore, exceeding the goal of ₹6.68 lakh crore. Total revenue receipts in FY26 were to the tune of ₹33.86 lakh crore or 99.4% of the target.

Meanwhile, total government expenditure was to the tune of ₹49.05 lakh crore, or 98.8% of the FY26 target. Capital and revenue spending remained 97.6% and 99.1% of the respective targets, helping the government offset the marginal shortfall in receipts and control the deficit.

Capital expenditure last fiscal stood at ₹10.69 lakh crore against the revised estimate (RE) of ₹10.96 lakh crore, while revenue spending touched ₹38.36 lakh crore, compared with the RE of ₹38.69 lakh crore.

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April deficit

The government's fiscal position started the current financial year on a not-so-encouraging note in April, with the fiscal gap touching 21.4% of the annual target, against 11.9% a year before. This is driven by a drop in both tax and non-tax revenues while revenue and capital expenditures saw a jump.

FY26 net market borrowing cut

The data showed the Centre trimmed its net market borrowing to ₹10.06 lakh crore in FY26 from the RE of ₹10.40 lakh crore, likely aiming to soothe the bond market. It also raised its offtake from the National Small Savings Fund to ₹4.86 lakh crore, against the RE of ₹3.72 lakh crore. These two mostly fund the fiscal deficit.