India's April-August Fiscal Deficit Widens To Rs 5.98 Lakh Crore, At 38.1% Of FY26 Target

India's fiscal deficit for the period between April and August currently stands at Rs 5.98 lakh crore, according to the official data released by the Controller General of Accounts on Tuesday.

The fiscal deficit has reached 38.1% of the fiscal year 2026 target, which is wider as against the comparable year-ago period, when it stood at 27%. For the entire financial year, the government has set a target to cap fiscal deficit at Rs 15.68 lakh crore.

The uptick was led by was led by a muted 4% growth in revenue receipts, amid a 7% contraction in net tax revenues, even as the government’s total expenditure rose by 14% on account of a 43% spike in its capex during this period.

Government's revenue deficit in the first five month of the fiscal year stood at Rs 1.98 lakh crore, 37.9% of current fiscal's target of Rs 5.23 lakh crore.

The total expenditure for the April-August period stood at Rs 18.8 lakh crore, reaching 37.1% of the FY26 target. In the same period last year, total expenditure had reached 34.3% of the annual target and stood at Rs 16.5 lakh crore.

The revenue expenditure stood Rs 14.49 lakh crore at August-end, which is 36.7% of the FY26 estimate.

Out of this, the government has spent Rs 4.31 lakh crore for capital expenditure between April and August. This amounts to 38.5% of the total capex target for FY26.

The official data also showed that the government's revenue receipts stood at Rs 12.5 lakh crore between April-August, which is 38.6% of the target of Rs 34.2 lakh crore set for the entire fiscal.

Of this, revenue from gross tax collections for the first five months stood at Rs 8.1 lakh crore, 28.6% of the FY26 target of Rs 28.37 lakh crore. In the same period last year, the revenue via tax collection had reached 33.8% of the annual target.

The non-tax revenue, per the official data, has already reached 75.5% of its FY26 target of Rs 5.83 lakh crore. It stands at Rs 4.4 lakh crore for the April-August period.

"Gross tax revenues expanded by just 1% annually during the first five months of FY26, amid a 2% contraction in income tax collections owing to the extension of the deadline to file taxes as well as an adverse base, and a subdued 2% growth in corporate tax collections," Aditi Nayar, chief economist at ICRA noted. Besides, the growth in indirect tax collections also remained lacklustre, at just 3.3%, amid a contraction in customs duties and a mid-single digit growth in GST and excise duty collections, she added.

These trends suggest that some undershooting in the FY26 budgetary estimate for gross tax revenues, particularly on the direct taxes side, "seems imminent", which is also likely to weigh on the devolution to the states in H2 FY26, Nayar said. "Besides, the GST numbers would also need to be closely monitored following to assess the impact of the rate rationalisation on collections," she added.

As for the state tax devolution for the April-August period, it came in at Rs 5.3 lakh crore, which is higher as against Rs 4.6 lakh crore in the same period last year, according to the official data.