India’s Fiscal Deficit Doubles in April Amid Oil Price Surge

India’s fiscal deficit widened sharply to INR 3.6 trillion in April 2026, the first month of the 2026-27 fiscal year, nearly doubling from INR 1.9 trillion a year earlier. As a net energy importer, the country faces rising fuel subsidy costs due to soaring oil prices tied to the ongoing Middle East conflict. For the 2025-26 fiscal year, the deficit reached INR 15.2 trillion, down from INR 15.8 trillion the prior year, equating to 97.5% of the government’s revised estimates. This figure was better than the INR 15.7 trillion target, or 4.4% of GDP.

India’s fiscal deficit narrowed to INR 12.5 trillion in April–February 2025–26, down from INR 13.5 trillion a year earlier, reaching 80.4% of the full-year target, an improvement from 85.8% in the same period last year. Total receipts surged 9.6% year-on-year to INR 27.9 trillion (82.0% of the annual goal), with net tax revenues climbing to INR 21.5 trillion (vs. INR 20.2 trillion). Total expenditure rose 3.9% to INR 40.4 trillion (81.5% of the target), while capital spending, primarily on infrastructure, jumped to INR 9.3 trillion (84.8% of the annual plan, up from INR 8.1 trillion). The government aims to cut the fiscal deficit to 4.4% of GDP (INR 15.7 trillion) in FY2025–26, down from 4.8% in FY2024–25.

India’s fiscal deficit narrowed to INR 9.81 trillion in April–January 2025–26, down from INR 11.70 trillion a year earlier, reaching 63.0% of the government’s full-year target compared with 74.5% in the same period last year. Total receipts rose 12.8% year-on-year to INR 27.09 trillion, or 79.5% of the annual target, with net tax revenues at INR 20.94 trillion versus INR 19.0 trillion a year ago. Total expenditure increased 3.4% to INR 36.90 trillion, or 74.3% of the full-year target. Capital spending, largely focused on infrastructure, jumped to INR 8.42 trillion, reaching 76.9% of its annual objective compared with INR 7.6 trillion previously. The government aims to narrow the fiscal deficit to 4.4% of GDP, or INR 15.7 trillion, in FY2025–26, down from 4.8% in FY2024–25.