India's April-May Fiscal Deficit At 0.8% Of FY26 Target After Record RBI Bonanza

India's fiscal deficit in April-May stood at only 0.8% of the fiscal year 2026 target as the Reserve Bank of India's record dividend of Rs 2.69 lakh crore transferred last month has bolstered the government's finances.

The fiscal deficit for the two months came in at Rs 13,163 crore, as compared to the FY26 budgeted estimate of Rs 15.68 lakh crore, according to the official data released on Monday.

In the comparable year-ago period, the country's fiscal deficit had stood at 3.1% of the FY25 target.

The revenue surplus in the April-May period of the current fiscal came in at Rs 1.83 lakh crore. This marks a surplus of 34.9% as compared to the FY26 target.

The total expenditure during the first two months of this fiscal came in at Rs 7.46 lakh crore, which is 14.7% higher as against the budgeted targeted for FY26. Out of this, Rs 5.24 lakh crore is on revenue account and Rs 2.21 lakh crore on capital account.

The revenue expenditure stood at Rs 5.25 lakh crore, which is 13.3% of the FY26 target. "Out of the total revenue expenditure, Rs 1,47,788 crore is on account of interest payments and Rs 51,253 crore is on account of major subsidies," the Ministry of Finance said in a release.

The government's total receipts for April-May stood at Rs 7.33 lakh crore, which is 21% of the full-year target. This includes net tax revenue of Rs 3.5 lakh crore, or 12.4% of the FY26 target. In the comparable year-ago period, the net tax revenue stood at 12.3%.

The non-tax revenue collection witnessed a significant jump during the two months, as it came in at Rs 3.57 lakh crore, or 61.2% of the full-fiscal target. In the year-ago period, it stood at 46.1%.

The Centre's revenue receipts were also supported by a sharp jump in non-debt capital receipts, which came in at Rs 25,224 crore in the April-May period — 33.2% of the full-year target. In the comparable year-ago period, it stood at 2.7% of the FY25 target.

The jump in non-tax revenue was driven by the transfer of Rs 2.69 lakh crore as dividend by the central bank to the government in May-end. The RBI bonanza, which is the highest-ever, came months after the government set a target to cut its fiscal deficit to 4.5% during FY26.

The Ministry of Finance, in its release, noted that Rs 1.63 lakh crore has "been transferred to state governments as devolution of share of taxes". This is Rs 23,720 crore higher than the previous year, it added.