India’s fiscal deficit for April–August stood at Rs 5.98 lakh crore, or 38.1% of the FY26 target. This is higher than 27% a year ago. The fiscal deficit represents the gap between government spending and receipts (excluding borrowings). It serves as a key indicator of budgetary health.

The revenue deficit was Rs 1.9 lakh crore, while both expenditure and revenue receipts rose year-on-year. Capital expenditure increased to Rs 4.31 lakh crore from Rs 3.01 lakh crore. This underscores the government’s emphasis on infrastructure and economic growth.

Non-tax revenue increased to Rs 4.40 lakh crore from Rs 3.34 lakh crore. This was supported by higher dividends, profits, and fees from state-owned enterprises.

State tax devolution increased to Rs 5.30 lakh crore from Rs 4.55 lakh crore. This provides states with more fiscal space for development and welfare schemes.

The FY26 budget projects a fiscal deficit of 4.4% of GDP, representing a gradual path of fiscal consolidation. This supports growth.

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