India’s fiscal position for the first half of FY26 (April–September) shows a mix of strong capital spending and moderated revenue growth. According to data released by the Controller General of Accounts (CGA), the fiscal deficit stood at ₹5.73 lakh crore, accounting for 36.5% of the full-year budget estimate. This performance reflects a cautious but steady approach toward fiscal management amid a challenging global environment.

Fiscal Performance Overview

The government’s total expenditure during April–September reached ₹22.4 lakh crore, or about 45.5% of the FY26 target, indicating consistent spending momentum. Within this, capital expenditure (capex) – a key driver of infrastructure and long-term growth – amounted to ₹5.4 lakh crore, or 51.8% of the annual target, underscoring the government’s continued focus on building productive assets.

On the revenue side, net tax revenue stood at ₹13.2 lakh crore, achieving roughly 41.2% of the full-year goal. While GST collections have remained robust, certain indirect tax reductions and subdued non-tax revenues have slightly moderated overall receipts.

Focus on Growth and Fiscal Stability

Despite the widening deficit, fiscal management remains on track to meet the government’s FY26 target of 5.1% of GDP. The rise in capital expenditure highlights the administration’s commitment to boosting economic growth through public investment, even as it maintains fiscal prudence.

Economists point out that higher spending on infrastructure, defence, and rural development could yield multiplier effects, supporting employment and private sector demand. However, a close watch will be needed on revenue buoyancy and fiscal consolidation, particularly in the second half of the financial year.

Broader Economic Implications

India’s sustained investment-led growth model continues to balance fiscal discipline with the need for expansion. The healthy pace of capital spending, combined with measures to enhance tax compliance and digital efficiency, is expected to reinforce the country’s growth momentum.

For investors and financial advisors, the government’s emphasis on capex-led growth provides positive signals for sectors like infrastructure, capital goods, engineering, and construction. At the same time, the cautious stance on revenue and expenditure alignment reflects a commitment to long-term macroeconomic stability.

Key Takeaways

• Fiscal deficit at ₹5.73 lakh crore (36.5% of FY26 target).

• Total expenditure reached 45.5% of the budgeted outlay; capex utilization at 51.8%.

• Net tax revenue achieved 41.2% of annual target amid moderated collections.

• The government remains focused on maintaining growth momentum and fiscal prudence.

The current data reaffirms India’s balanced approach fueling economic activity through strategic capital spending while staying on course toward fiscal consolidation.

Source: MoneyControl