India's April‑May fiscal deficit spikes to ₹1.62 lakh crore, 9.6% of FY27 target

The Indian central government reported a fiscal deficit of ₹1.62 lakh crore for the April‑May period of FY27, representing 9.6 % of the FY27 budget estimate. This marks a more than twelve‑fold increase compared with the same period last year, when the deficit was about ₹13,200 crore (0.8 % of the budget).

Revenue collections fell to roughly ₹6.99 lakh crore, a 1 % drop year‑on‑year, with a sharp 20 % decline in excise duty on petrol and diesel driving the fall in tax receipts. Non‑tax revenues rose about 13 % after a record dividend transfer of ₹2.87 lakh crore from the Reserve Bank of India. Total government spending reached ₹8.81 lakh crore, up 18 % in the two‑month span, with capital expenditure increasing 13 % to ₹2.51 lakh crore.

Icra chief economist Aditi Nayar noted that lower global energy prices after reduced West Asian tensions have improved the fiscal outlook for FY27, expecting only a marginal overshoot of the 4.3 % of GDP deficit target.