India’s journey toward fiscal consolidation continues apace, with the fiscal deficit touching Rs 9.8 lakh crore by late January 2026—equivalent to 63% of the FY 2025-26 budget target. These figures, released by the Finance Ministry, paint a picture of robust revenue collection offsetting substantial expenditures.
Cumulative receipts soared to Rs 27.08 lakh crore, hitting 79.5% of revised annual projections. Tax revenues led the charge with Rs 20.94 lakh crore in net collections, supplemented by Rs 5.57 lakh crore from non-tax sources and Rs 57,129 crore in non-debt capital inflows. States received a record Rs 11.39 lakh crore in tax devolution, up Rs 65,588 crore from last year, fueling cooperative federalism.
Total spending reached Rs 36.90 lakh crore, or 74.3% of estimates, split between Rs 28.47 lakh crore in revenue outgo and Rs 8.42 lakh crore in capital investments. Key highlights include Rs 9.88 lakh crore on interest servicing and Rs 3.54 lakh crore on subsidies, highlighting persistent structural demands.
Looking ahead, Finance Minister Nirmala Sitharaman announced plans to reduce the deficit to 4.3% of GDP in 2026-27, following the 4.4% glide path met this year. Her budget address stressed this as a delicate balance act—sustaining growth while anchoring fiscal credibility.
Economists view these numbers positively, signaling effective policy execution. With two months left in the fiscal year, strategic adjustments could further enhance outcomes, positioning India as a beacon of fiscal responsibility in emerging markets.