The Centre’s fiscal deficit came in at 36.5% of the annual target in the first six months of 2025-26, compared with 29.4% in the year-ago period, largely due to a surge in capital expenditure while net tax revenues continued to contract.

The Centre’s fiscal deficit in H1FY26 stood at Rs 5.73 lakh crore compared with Rs 4.75 lakh crore in H1FY25. Its budgetary capital expenditure (capex) rose a steep 40% on year in H1FY26, partly helped by a 15% year-on-year fall seen in H1FY25 due to election-related lull. Capex rose by 31% on-year in September 2025. Overall, the capex stood at Rs 5.8 lakh crore or 51.8% of the annual target in H1FY26 as against 39% in the year-ago period. Robust capex by the Centre is seen to have helped boost the Q2FY26 GDP. The economy expanded by a higher-than-ant

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