Fiscal deficit widens to ₹7.14 trillion or 42.1% of FY27 target in first six months | Today’s news

New Delhi: India’s fiscal deficit widened in the first six months of FY27 as capital and subsidy outlays continued to rise.

The fiscal deficit, or the difference between government spending and revenue, remained flat ₹7.14 trillion at the end of September, the latest data from the Comptroller General of Accounts (CGA) showed. This represents 42.1% of the full-year budget estimate, up from 36.5% in the same period last year. At the end of August, the fiscal deficit was 41.9% of the annual target.

The higher share of the budgeted fiscal deficit, already incurred in the first half of FY27, indicates increasing pressure on the government’s fiscal balance, with spending growing faster than the pace of deficit accumulation seen in the year-ago period. The center has a budget deficit of ₹16.96 trillion or 4.3% of GDP in FY27. It is counting on robust tax collection and higher non-tax revenue in the coming months to meet this target.

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A fiscal deficit is usually financed through borrowing. The widening gap takes on significance as the government nearly reduced its market borrowing for FY27 ₹1.2 trillion and now plans to increase ₹7.86 trillion dated government securities in the second half of the fiscal year, Mint reported on September 25. The center now expects to borrow ₹15.995 trillion through dated securities during FY27 compared to ₹17.2 trillion is estimated in the Union Budget, according to the finance ministry’s borrowing plan released in consultation with the Reserve Bank of India (RBI) on September 25.

The latest figures showed that total government spending reached ₹25.50 trillion by September, equivalent to 47.7% of the full-year budget estimate, while total revenue was ₹18.35 trillion, or 50.3% of the annual estimate.

Including receipts ₹12.76 trillion in tax revenue (net to the centre), ₹4.81 trillion in non-tax revenue and ₹78,602 crore under non-debt capital receipts. Income stood at ₹17.57 trillion, or 49.7% of the estimated budget, by September. Net tax revenue reached 44.5% of the annual budget estimate ₹28.67 trillion, while non-tax revenue accounted for 72.2% of it ₹6.66 trillion budget for the year.

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The center also received ₹78,602 crore through non-debt capital receipts, incl ₹16,443 crore in loan recovery and ₹62,159 crore under other income. Non-debt capital income was 66.4%. ₹Budget estimate 1.18 trillion.

The government had a budget ₹36.52 trillion in total income for FY27, including income and non-debt capital income.

Capital expenditure picked up pace during the period and reached ₹6.55 trillion, or 53.6% of the full-year budget estimate ₹12.22 trillion compared to 51.8% in the same period last year. This indicates that the center has already used more than half of its planned capital expenditure in the first six months of the financial year.

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Loans disbursed in the given period remained at ₹1.51 trillion or 54.2% of it ₹2.79 trillion budget estimate for FY27.

Interest payments amounted to ₹6.46 trillion, representing 46% ₹14.04 trillion budgeted for FY27. The corresponding figure a year earlier was 45.3% of the annual allocation.

Spending on large subsidies remained at ₹2.23 trillion during April-September, or 54% of that ₹4.11 trillion budgeted for FY27. This was higher than the 53% utilization recorded in the same period of the previous year. Urea Subsidy Expenditure Achieved ₹85,586 crores, or 73% of it ₹1.17 trillion full-year allocation compared to 66% utilization in the same period last year.

Meanwhile, spending under the nutrient-based fertilizer subsidy remained flat ₹33,664 crore, representing 62% of it ₹54,000 crore annually, compared to 60% a year earlier.

Expenditure on food subsidies remained the same ₹1.03 trillion or 45% of it ₹2.28 trillion budget allocation compared to 43% utilization in the same period of the previous year. Food subsidies are primarily spent on providing free food grains to eligible beneficiaries under the National Food Security Act (NFSA) through the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

Oil subsidy expenditures were ₹1,149 crores, or 10% of it ₹12,085 crore per annum allocation compared to 56% utilization a year earlier.

The center’s income deficit was at par ₹1.38 trillion by September, equivalent to 23.4% ₹5.92 trillion budget estimate for the entire year. The corresponding figure was 5.2% of the annual target in the previous year.