Capital Expenditure Push Continues as Fiscal Deficit Remains Within Targeted Range in February

India's Fiscal Position Remains Steady in FY26

India's fiscal position remained steady in the first eleven months of the financial year 2026, with higher capital spending and improved deficit indicators, according to government data released on March 30.

Capital Expenditure Reaches 84.8 Percent of Revised Estimate

Capital expenditure reached 84.8 percent of the revised estimate (RE) during April-February, higher than 79.7 percent in the same period last year. This reflects the continued focus on infrastructure-led growth. At the same time, the fiscal deficit stood at 80.4 percent of the full-year target, compared with 85.8 percent a year ago, indicating better fiscal consolidation even as spending picked up.

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Government Confident of Meeting Fiscal Deficit Target

The government is confident of meeting its fiscal deficit target of 4.4 percent for FY26 despite the West Asian crisis. The government spent Rs 9.29 lakh crore on capital expenditure in the first eleven months, maintaining a faster pace than last year.

Receipts and Interest Payments

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On the receipts side, total collections stood at 81.6 percent of the revised estimates, broadly in line with the previous year. Net tax revenue came in at 80.2 percent of the target, improving from 78.8 percent last year, while non-tax revenue was lower at 87 percent. Non-debt capital receipts exceeded the full-year target at 102.4 percent, supported by higher recoveries and other inflows. Interest payments stood at 83.6 percent of the annual target, largely unchanged from the previous year, indicating stability in debt servicing costs.