Centre saves ₹55,000 crore as FY26 spending undershoots estimates

New Delhi: The Centre's spending in 2025-26 undershot its revised estimates by about ₹55,000 crore, largely due to slower-than-expected capital expenditure and unutilised funds across ministries, said a senior official.

The savings will help the government absorb some shortfall in direct tax collection and any additional expenditure under certain heads, enabling it to stay on track with its fiscal calculations.

While presenting the budget for 2026-27 in February, the Centre had already pared its expenditure estimate for the year ending March 31 to ₹49.64 lakh crore from the original ₹50.65 lakh crore.

"Some ministries were not able to spend even the revised allocations, so we were able to save," said the official, who did not wish to be identified.

The exact savings will be reflected when the Centre publishes the annual numbers on May 31.

Saving Grace

The additional savings were mainly on account of large unspent amounts by key ministries.

These included the ministries of water and sanitation, and housing and urban affairs, which were unable to utilise even their revised lower estimates.

Also Read: Fiscal deficit until February eases to 80.4% of FY26 target

Centrally sponsored schemes affected by the lower spending include PM Awas Yojana, Swachh Bharat Mission, AMRUT and the National Livelihood Mission.

The official said that plugging loopholes helped the Centre save a portion of the budgeted direct benefit transfer (DBT) amount.

"We have saved on food subsidy transfers through the Public Distribution System (PDS), which have declined to ₹1.5 lakh crore from ₹1.63 lakh crore," the official said.

The liquefied petroleum gas subsidy programme under DBT also saw a decrease in spending, according to the official, to ₹12,430 crore from ₹18,068 crore in 2024-25, due to prompt revision of the beneficiary list.

Also Read: India’s April–February fiscal deficit at Rs 12.53 lakh crore, narrows on-year to 80.4% of FY26 aim

However, DBT under fertiliser subsidies increased to Rs 1.9 lakh crore in 2025-26 from Rs 1.78 lakh crore in the previous year, on account of elevated global input costs.

Overall, DBT fell 5% to ₹6.6 lakh crore in 2025-26 from ₹6.9 lakh crore a year ago.