India’s April-November Fiscal Deficit At Rs 9.8 Lakh Crore, Touches 62.3% Of FY26 Target

India’s fiscal deficit during April-November 2025.

India’s fiscal deficit in the April-November period stood at Rs 9.8 lakh crore, or 62.3% of the estimate for the full financial year ending March 31, according to government data released on Wednesday, December 31, 2025.

The government has a fiscal deficit target of 4.4% of GDP for 2025-26, translating into Rs 15.7 lakh crore.

Net tax receipts during the period declined to Rs 13.9 lakh crore, compared with Rs 14.4 lakh crore collected in the same period last year, reflecting pressure on tax collections amid uneven economic conditions.

In contrast, non-tax revenue rose sharply to Rs 5.2 lakh crore, up from Rs 4.3 lakh crore a year earlier, providing some cushion to the government’s overall receipts.

Total government expenditure increased to Rs 29.3 lakh crore, compared with Rs 27.4 lakh crore in the corresponding period of the previous year, indicating sustained public spending.

Capital expenditure, spending on building physical infrastructure such as roads, railways and other assets, saw a significant jump to Rs 6.6 lakh crore, up from Rs 5.1 lakh crore a year ago, underlining the government’s continued push on infrastructure-led growth.

The April-November numbers offer an early snapshot of the Centre’s fiscal position ahead of the final quarter of the financial year, which typically sees a sharp rise in spending as ministries accelerate outlays to meet annual targets.

Aditi Nayar, chief economist of ICRA Ltd, said, “The Government of India’s (GoI) fiscal deficit widened to Rs 9.8 lakh crore or ~62% of the FY2026 BE during April-November FY2026 from Rs 8.5 lakh crore (~53% of PE) in the year ago period, amid a 28% YoY surge in capex, even as the revenue deficit printed in line with the year ago levels. Notably, while net tax revenues contracted by 3.4% during this period, non-tax revenues expanded by 20.8% and revenue expenditure rose by a muted 1.8%, keeping the revenue deficit in check.”

The GoI’s gross tax revenues declined by 3% in November 2025; overall, gross tax revenues rose by just 3.3% YoY during April-November FY2026. While the performance of direct taxes improved, that of indirect taxes remains subdued post the GST rationalisation. Within indirect taxes, customs duties contracted by 7.3% while CGST and excise collections rose by 5-9%. Interestingly, IGST settlement between the Centre and the states over the recent months appears to have dampened the gross tax revenues of the GoI in 8M FY2026, she added.

“We now anticipate a shortfall of Rs 1.5 lakh crore in the GoI’s gross tax revenues in the current fiscal relative to the FY2026 BE. The GoI’s capex contracted for the second consecutive month in November 2025, thereby declining by 21% in October-November 2025 after having expanded by 31% in Q2 FY2026. Nevertheless, capex recorded a healthy rise of 28% YoY during 8M FY2026, amounting to ~59% of the FY2026 BE as against ~49% in the year ago period. Given the upfronting seen in H1 FY2026, capex needs to contract by ~14% YoY during December-March FY2026 to remain within the FY2026 BE. However, we anticipate the GoI to enhance the allocation for capex somewhat, limiting the contraction in the last four months of the fiscal,” Nayar said.