Centre's fiscal deficit touches ₹7.14 lakh crore in H1 FY27 on elevated capital spending and subsidy outlays

Key facts

• The Centre's fiscal deficit in the first half of FY 2026-27 reached ₹7.14 lakh crore, or 42.1% of the full-year target, up from 36.5% (₹5.73 lakh crore) a year earlier, per Controller General of Accounts data released on Friday.
• The government has set a fiscal deficit target of 4.3% of GDP, or ₹16.96 lakh crore, for FY27.
• Total expenditure rose 10.7% year-on-year to ₹25.49 lakh crore by September, equivalent to 47.7% of the full-year budget estimate.
• Spending on major subsidies rose 10.1% to ₹2.23 lakh crore in April-September, with food subsidy up 16% and petroleum subsidy down almost 83%.
• Capital expenditure reached ₹6.55 lakh crore, or 53.6% of the full-year budget estimate of ₹12.22 lakh crore, compared to 51.8% a year ago.
• Capex grew 12.7% in H1 FY27, requiring a 16.2% growth rate in the second half to meet the budget estimate.
• The government received ₹18.35 lakh crore (50.3% of budget estimate) in total receipts up to September, including ₹12.76 lakh crore of tax revenue (44.5% of BE) and ₹4.8 lakh crore of non-tax revenue.
• Gross tax revenue rose 6.1% year-on-year in April-September despite a sharp fall in excise duty collection due to petrol and diesel excise cuts.
• Customs duty collections grew 16.5% in the first half.
• In September, the fiscal deficit was ₹4,164 crore, against a surplus of ₹25,030 crore a year earlier.
• ₹6.99 lakh crore was transferred to states as devolution of taxes, ₹67,658 crore higher than the previous year.
• The government reduced its market borrowing for the fiscal by nearly ₹1.2 lakh crore.