India hits 2025-26 deficit target 4.4% and aims for 4.3%

Business Jun 01, 2026

India just hit its fiscal deficit goal for 2025-26, keeping it at 4.4% of GDP, right on track with what was planned.
The revenue deficit also came in at 1.55% of GDP.
But next year's challenge is bigger: the government wants to lower the deficit even more, aiming for 4.3% in FY27, despite rising costs and tighter finances.

Middle East crisis raises subsidy spending

Thanks to the Middle East crisis, subsidy spending on essentials like food, fertilizer, and fuel has gone up, making it harder to stick to that new fiscal target.
Even though the Reserve Bank of India handed over a record ₹2.87 lakh crore surplus this year, it didn't fully meet budget hopes for dividend receipts.
All these pressures mean keeping India's finances stable will take some careful balancing in FY27.