India’s fiscal deficit for FY25 came in at 4.8% of GDP, narrowly beating expectations and matching the revised estimate set by the Finance Ministry. Government accounts released on May 30 show that the deficit reached Rs 15.77 lakh crore — 100.5% of the revised annual target — marking a sharper drawdown compared to 95.4% in the same period last year.

Total government expenditure stood at Rs 46.56 lakh crore, accounting for 98.7% of this fiscal year’s revised budget target. On the revenue side, receipts totaled Rs 30.36 lakh crore, with tax collections at Rs 24.99 lakh crore and non-tax revenue at Rs 5.38 lakh crore.

Tax revenue came in at 97.7% of the revised estimate, while non-tax revenue slightly exceeded expectations at 101.2%. However, both fell short of last year’s performance, when tax and non-tax collections hit 100.1% and 106.9% of their respective budget forecasts.

Finance Minister Nirmala Sitharaman, in her Budget announcement earlier this year, revised the fiscal deficit target to 4.8% from the initial 4.9%, a move supported by restrained capital spending and a higher-than-expected dividend from the central bank.

Sticking to its fiscal consolidation path, the government has set a deficit target of 4.4% for FY26 — signaling its intent to bring the gap below 4.5% by the following year. This commitment comes as the administration weighs policy moves, including tax cuts and spending boosts, to counter a projected economic slowdown.