The fiscal deficit for April-June was Rs 2,80,000 crore or 17.9% of the estimate for the financial year ending March 31. As per the government data, total receipts stood at Rs 94.14 lakh crore i.e. 26.9% of this fiscal year’s budget target.
Further, the revenue receipts stood at Rs 9.13 lakh crore, of which tax revenue was Rs 5.40 lakh crore and non-tax revenue was Rs 3.73 lakh crore. Tax and non-tax revenues were 19% and 64% of the budgeted estimate.
Non-tax revenue jumped as the Reserve Bank of India approved a dividend of Rs 2.69 lakh crore to the central government, up from Rs 2.11 lakh crore transferred last year. This will help the central government reduce its fiscal deficit. Revenue expenditure stood at Rs 9.47 lakh crore by the end of June.
Aditi Nayar, Chief Economist, ICRA, highlighted that in the first quarter of FY2026, net tax revenues contracted by 2%, while non-tax revenues surged by 33% on a YoY basis following the receipt of the higher-than-budgeted dividend from the RBI.
While revenue expenditure expanded by 20%, capital expenditure surged by 52% on last year’s election-curtailed base.
Tepid direct tax collections in June 2025 pulled down the performance of gross tax revenues in the month, although this was driven by an adverse base, even as devolution to states maintained a robust pace, she said.
“Although the GoI’s capital expenditure expanded by a sharp 52% YoY in Q1 FY2026, this was on a low base and was 1% lower than the levels seen in Q1 FY2024. Nevertheless, the capex amounted to a healthy ~25% of the FY2026 BE, and the same can now contract by as much as 3% in the remaining 9 months of FY2026 and still meet the target,” Aditi mentioned.
Given the buffers on the receipts side, ICRA believes that the GoI could push up capex by ~Rs. 0.8 trillion in FY2026 relative to the BE, boosting the headline figure to nearly Rs. 12.0 trillion (vs. FY2026 BE of Rs. 11.2 trillion) and take the YoY growth in the same to a healthy 14.2%.