Centre’s Fiscal Deficit Hits 62.3% of FY26 Target by November
Source: Reuters via Hindu
New Delhi: The Centre’s fiscal deficit stood at ₹9.77 lakh crore at the end of November 2025, accounting for 62.3% of the budgeted estimate for the full financial year 2025-26. This marks a sharp increase compared to the same period last year, when the fiscal deficit was at 52.5% of the annual target, reflecting mounting pressure on government finances midway through the fiscal year.
The widening deficit has been primarily driven by a sharp rise in capital expenditure during the April–November period, even as tax revenues showed slower growth. Capital expenditure reached ₹6.58 lakh crore during the first eight months of the financial year, registering a 28% increase over the corresponding period last year. In contrast, revenue expenditure grew modestly by 2.1% to ₹19.1 lakh crore.
Despite higher capital spending, overall expenditure remained relatively contained. Total expenditure stood at ₹29.26 lakh crore by the end of November, representing 57.8% of the budgeted figure for the year, slightly higher than 56.9% recorded during the same period last year.
On the receipts side, tax revenue performance remained subdued. Total tax collections amounted to ₹13.9 lakh crore, a decline of 3.4% compared to the same period in 2024-25, and stood at just 49% of the budgeted target. Non-tax revenue, however, provided some relief, rising nearly 21% year-on-year.
Commenting on the trend, Bank of Baroda chief economist Madan Sabnavis said the impact of GST rate cuts was visible in lower tax collections, though some recovery could be expected from direct tax inflows following advance tax payments in December.
Our Final Thoughts
The fiscal numbers underline the government’s continued push on capital expenditure to support growth, even as tax revenue challenges persist. Balancing investment-led expansion with revenue mobilisation will be crucial in the months ahead.