Stories
Fiscal Deficit Soars to 42% of Target Amid Rising Subsidies and Capex Push
M
Moneycontrol•30-09-2026, 16:52
Fiscal Deficit Soars to 42% of Target Amid Rising Subsidies and Capex Push
- •India's fiscal deficit reached 42% of the full-year Budget Estimate by August 2026, up from 38% last year, totaling Rs 7.10 lakh crore against a target of Rs 16.96 lakh crore.
- •Government expenditure on major subsidies surged by 24.4% year-on-year to Rs 1.87 lakh crore, driven primarily by increases in food and urea subsidies.
- •Food subsidy expenditure climbed nearly 30% to Rs 83,510 crore, while urea subsidy spending increased by 27.9% to Rs 77,522 crore, with 66% of the annual urea budget already utilized.
- •The Centre continued its capital expenditure push, with capex rising to 42% of the full-year target, compared to 39% in the corresponding period last year.
- •Market borrowings accounted for Rs 5.30 lakh crore, or 41% of the budgeted amount, while financing through small savings securities reached Rs 1.12 lakh crore, or 29% of the annual estimate.
Key Questions Answered
The Centre's fiscal deficit rose to nearly 42 percent of the full-year Budget Estimate at the end of August 2026, reaching Rs 7.10 lakh crore against the full-year target of Rs 16.96 lakh crore for 2026-27.
Government expenditure on major subsidies increased by 24.4 percent year-on-year to Rs 1.87 lakh crore from Rs 1.50 lakh crore during the same period last year, driven mainly by food and urea subsidies.
Food subsidy expenditure rose nearly 30 percent to Rs 83,510 crore, while urea subsidy spending increased 27.9 percent year-on-year to Rs 77,522 crore, with the government already spending 66 percent of the Rs 1.17 lakh crore earmarked for urea.
