The Centre’s fiscal deficit widened to Rs 3.07 lakh crore during the first quarter of 2026-27, accounting for 18.2% of the full-year target at the end of June, according to data released by the Controller General of Accounts.

The fiscal deficit stood at around Rs 2.81 lakh crore, or 17.9% of the annual Budget Estimate, during the corresponding April-June period of the previous financial year. The government had budgeted a fiscal deficit of Rs 16.96 lakh crore, equivalent to 4.3% of gross domestic product, for FY27.

Fiscal deficit refers to the gap between the government’s total expenditure and its revenue, excluding borrowings. The gap is generally financed through market borrowing and other sources.

Tax collections rise to Rs 6.36 lakh crore

The Centre’s net tax revenue stood at Rs 6.36 lakh crore during April-June, according to data released by the Controller General of Accounts. 

This was equivalent to 22.2% of the full-year Budget Estimate for net tax revenue. In the same period last year, collections had reached 19% of the corresponding annual target for last year.

In absolute terms, net tax receipts increased from about Rs 5.4 lakh crore a year earlier.

Non-tax revenue, which includes dividends, interest receipts and fees collected by the government, stood at around Rs 3.8 lakh crore. It was Rs 3.7 lakh crore in the corresponding period last year.

Government spending increases in Q1

The Centre’s total expenditure rose to Rs 13.57 lakh crore in the first three months of FY27, compared with around Rs 12.22 lakh crore a year earlier.

Spending during the quarter was equivalent to 25.4% of the annual Budget Estimate, higher than the 24.1% recorded in the same period last year.

Capital expenditure increased to around Rs 3.4 lakh crore from Rs 2.75 lakh crore in the year-ago period.

Capital expenditure refers to government spending that creates long-term assets, such as roads, railways and other physical infrastructure. It is closely tracked because such expenditure can support investment, development of infrastructure and create employment.

The CGA cautions that the fiscal deficit recorded during individual months or parts of a financial year may not necessarily indicate the eventual deficit for the full year. Government receipts and expenditure can vary considerably across different months.