In the corresponding period of the previous fiscal year, the net tax revenue was at 23.3 per cent of that year’s BE
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India’s fiscal deficit for the first four months of this fiscal year stood at ₹4.55 lakh crore or 26.8 per cent of the full-year target at the end of July, according to data released by the Controller General of Accounts (CGA) on Monday.
The deficit was at 29.9 per cent of Budget Estimates (BE) of 2025-26 for the first four months of the previous financial year.
While presenting the Budget for FY27, Finance Minister Nirmala Sitharaman had pegged the fiscal deficit target of 4.3 per cent of the GDP or ₹16.96 lakh crore for the current fiscal, maintaining that the government’s fiscal consolidation path and its commitment to keeping the Budget gap under control.
According to the CGA, revenue receipts stood at ₹12,67,573 crore of which the net tax revenue was about ₹844,560 crore, or 29.5 per cent of the corresponding BE of 2026-27 of total receipts, up to July 2026.
In the corresponding period of the previous fiscal year, the net tax revenue was at 23.3 per cent of that year’s BE.
Non-tax revenue was ₹4.23 lakh crore. Non tax revenue typically includes dividends from public sector enterprises and the Reserve Bank of India, spectrum-related income and various fees collected by the government. Non-tax revenue jumped as the RBI approved a dividend of ₹2.87 lakh crore to the Central government, up from ₹2.69 lakh crore transferred the previous year. This aids in reducing fiscal deficit.
Revenue deficit was at ₹43,645 crore or 7.4 per cent of the fiscal year’s Budget target, data showed.
The data on monthly accounts showed that the total expenditure during the first four months was at about , ₹17.61 lakh crore or 32.9 per cent of BE. In the year-ago period, it was at 30.9 per cent of BE.
The Centre transferred ₹3,72,354 crore to State governments as devolution of share of taxes during the period, which is Rs 56,190 crore lower than the previous year.
According to Aditi Nayar, Chief Economist, ICRA, the moderation in fiscal deficitwas entirely driven by a sharp narrowing in the revenue deficit even as capex surged by about 30 per cent during this period.
“The government’s gross tax revenues rose by a healthy 11 per cent y-o-y in 4M FY27, led by a 20 per cent-plus growth in direct taxes, amid a low base, and a 38 per cent growth in customs duty collections aided by the hike in duties on gold and silver. Net tax collections rose by a much healthier 28 per cent in 4M FY27, amidst a contraction in CTD to the States, as four tranches of devolution have been shared with the States in April-July FY27 versus five in April-July FY26. With two tranches being shared in August 2026 vs. one in August 2025, the pace of growth will normalise and come closer to that of gross tax revenues,” Nayar said.
While ICRA estimates the fiscal deficit to overshoot the FY27 BE by about ₹0.9-1.0 trillion, this could be comfortably absorbed by expenditure savings, which amounted to ₹1.6-1.7 trillion during FY25-26.
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