The Government of India's (GoI's)fiscaldeficit was contained at Rs. 15.2 trillion in FY2026, as per the provisional actuals (PA) released by the Controller General of Accounts (CGA), undershooting the revised estimate (RE) of Rs. 15.6 trillion, and containing the fiscal deficit at the targeted 4.4% of GDP. This stemmed from compression in both revenue and capital expenditure compared to the revised targets, and overshooting in miscellaneous capital receipts, which outweighed the modest miss in revenue receipts. Subsequently, FY2027 has begun on an expectedly sombre note, with a YoY dip in net tax and non-tax revenues and surge in total expenditure, resulting in fiscal deficit widening to Rs. 3.6 trillion in April 2026 from Rs. 1.9 trillion in April 2025. While fiscal risks abound, ICRA estimates the fiscal slippage at a moderate ~40 bps over the budgeted 4.3% of GDP for FY2027. Nevertheless, the incremental borrowing requirement may be limited by higher cash balances aided by the sizeable overshooting in small savings inflows seen in FY2026.

EXHIBIT: GTR and its components in March 2026

*Excluding security transaction tax (STT) amount; GTR: Gross Tax Revenue; CT: Corporation Tax; PIT: Personal Income Tax; Source: CGA, Ministry of Finance, GoI; ICRA Research