India's April-January fiscal deficit at Rs 11.70 lakh crore, widens on-year to 74.5% of FY25 revised aim

India’s fiscal deficit for the first 10 months of this fiscal year through December stood at 11.70 lakh crore rupees, or 74.5% of annual estimates, government data showed today.

The fiscal deficit widened from 63.6% reported in the comparable year-earlier period.

While announcing the federal budget for the next fiscal year that starts April 1, Finance Minister Nirmala Sitharaman revised the fiscal gap target down to 4.8% from 4.9% pegged in this fiscal year’s budget, likely aided by reduced spending on planned capital investments and a larger-than-expected central bank dividend.

In the Budget, the government stuck to its fiscal consolidation roadmap and set the fiscal deficit target for 2025-26 at 4.4%, in line with its goal of bringing the budget gap below 4.5% by fiscal 2026. This comes amid the possibility of increased spending and income tax rate cuts to stimulate consumption in an economy expected to see its slowest growth in four years.

The lower fiscal deficit target for 2025-26 was expected on hopes of strong tax collections, despite the government’s continued capex push that is crucial to shore up consumption and create jobs and help India achieve its aim to be world’s third largest economy by 2030.