Centre’s Fiscal Deficit Shrinks To 0.8% Of FY26 Target By May: CGA

The central government’s receipts for the April–May period stood at Rs 7.32 lakh crore, which is 21 per cent of the estimated receipts for FY26

According to CGA data, revenue under the ‘dividends and profits’ category was Rs 2.78 lakh crore, accounting for 86 per cent of the budget estimate for the year

Source : ABPLIVE AI

India's fiscal deficit narrowed sharply to just 0.8 per cent of the full-year target by the end of May 2025, thanks largely to an unprecedented Rs 2.69 lakh crore dividend payout by the Reserve Bank of India (RBI). The data, released by the Controller General of Accounts (CGA) on Monday, marked a significant improvement compared to April, when the deficit had surged to 11.9 per cent of the Budget Estimates (BE), amounting to Rs 1.86 lakh crore.

For the current fiscal year, the Centre has projected a fiscal deficit of 4.4 per cent of GDP, or Rs 15.69 lakh crore. The steep fall in the deficit level between April and May signals a major easing in fiscal pressure due to the RBI’s windfall dividend and improved revenue mobilisation.

At the same point in the last financial year, the fiscal deficit had reached 3.1 per cent of the BE for 2024–25, indicating the current year's comparative improvement.

Strong Non-Tax Revenues Fuel Receipts

The central government’s receipts for the April–May period stood at Rs 7.32 lakh crore, which is 21 per cent of the estimated receipts for FY26. This includes Rs 3.5 lakh crore in net tax revenue, Rs 3.56 lakh crore from non-tax sources, and Rs 25,224 crore in non-debt capital receipts.

According to CGA data, revenue under the ‘dividends and profits’ category was Rs 2.78 lakh crore, accounting for 86 per cent of the budget estimate for the year.

States Get Higher Tax Devolution

The centre has also transferred Rs 1.63 lakh crore to state governments as part of their share in central taxes, which represents an increase of Rs 23,720 crore over the previous year.

On the expenditure side, the centre has incurred Rs 7.46 lakh crore, amounting to 14.7 per cent of the total BE for FY26. Of this, Rs 5.24 lakh crore was revenue expenditure, while Rs 2.21 lakh crore was spent under the capital account.

Within revenue spending, the government paid Rs 1.47 lakh crore towards interest obligations and Rs 51,253 crore on major subsidies, including food, fuel, and fertiliser.