India’s fiscal deficit widens to 36.5% in H1 FY26 as capex surges, revenue growth slows
New Delhi: India’s fiscal deficit for the first half of FY26 rose to 36.5% of the annual target, higher than 29.4% recorded in the same period last year, according to government data released on October 31.
The Centre utilised 51.8% of its full-year capital expenditure (capex) target of ₹11.2 lakh crore, compared with 37.3% during the first half of FY25.
Of the ₹5.8 lakh crore spent so far, ₹1.5 lakh crore was disbursed in September alone — a 30% increase from the previous year.
Loan disbursals under capex nearly doubled to ₹1.1 lakh crore, against ₹55,398 crore in the same period last year.
Total government expenditure reached 45.5% of the FY26 budget estimate of ₹50.7 lakh crore, up from 43.8% a year ago.
However, net tax revenue moderated to 43.3% of the annual target, down from 49% in H1 FY25.
Officials attribute the dip partly to the GST rate rationalisation implemented on September 22, though a post-festive consumption boost is expected to offset part of the shortfall.
Early signs of stronger demand are visible — two-wheeler sales rose 21.5% during the festive season, while UPI and e-commerce transactions also pointed to increased consumer spending.
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