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India’s fiscal deficit was Rs1.6 lakh crore in the first two months of the 2026-’27 financial year, reaching 9.6% of the government’s annual target, the Business Standard cited government data as showing.

This was 12 times the percentage of the annual target recorded during the same period last year, when it was 0.8%.

A fiscal deficit arises when the government’s expenditure exceeds the revenue it earns in a financial year.

The increase came despite a record Rs 2.8 lakh crore surplus transfer from the Reserve Bank of India in May, the newspaper reported.

Revenue receipts fell to Rs 6.9 lakh crore in April and May from Rs 7 lakh crore a year earlier, according to data released by the Controller General of Accounts on Tuesday.

Both tax revenue and non-tax revenue declined by 1% year on year. Total receipts fell 2% to Rs 7.1 lakh crore, or nearly 20% of the government’s annual revenue target, the Business Standard reported.

Within tax revenue, excise duty collections fell nearly 20% to Rs 2.1 lakh crore. In March, the government cut the special additional excise duty on petrol to Rs 3 per litre from Rs 13 per litre and on diesel to zero from Rs 10.

At the same time, government spending increased. Total expenditure rose 18% year on year to Rs 8.8 lakh crore,...

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