India’s path to fiscal prudence is on track, with the fiscal deficit for April-December FY26 clocking in at ₹8.55 lakh crore—54.5% of the full-year target of ₹15.7 lakh crore announced in the 2025-26 budget. The finance ministry’s latest release on Friday highlights a healthier trajectory than last year’s 56.7% mark for the same period.

Revenue collections hit ₹25.25 lakh crore (72.2% of budget estimates), outpacing expenditures at ₹33.81 lakh crore (66.7% of target). This gap demonstrates effective spending control amid rising inflows.

Tax revenues grew impressively to ₹19.4 lakh crore from ₹18.4 lakh crore YoY, while non-tax receipts expanded to ₹5.4 lakh crore. Overall spending rose modestly to ₹33.8 lakh crore from ₹32.3 lakh crore, with capex leading the charge at ₹7.9 lakh crore—a ₹1 lakh crore boost focused on infra projects.

Tax transfers to states surged by ₹1.37 lakh crore to ₹10.38 lakh crore, supporting regional development. With FY26’s deficit pegged at 4.4% of GDP (versus 4.8% for FY25), the government is prioritizing deficit reduction to bolster investor confidence.

Lower deficits mean less crowding out of private investment, more liquidity for businesses and consumers, and a stable environment for high-quality growth. These metrics position India favorably as it eyes sustained economic expansion.