In absolute terms, the fiscal deficit between April and December 2025 stood at ₹8.56 lakh crore, against ₹9.14 lakh crore a year earlier.
The data further bolsters the chances of the government meeting its target of containing its 2025-26 fiscal deficit at 4.4% of gross domestic product (GDP), experts said.
The deficit, which was much as 62.3% of the annual target until November this fiscal against 52.5% a year before, moderated after a fiscal surplus of ₹1.20 lakh crore in December. This was in contrast with a fiscal deficit of ₹67,495 crore in December 2024.
Net tax revenue jumped 36.5% in December from a year before to ₹5.45 lakh crore. This has driven up the growth in the net tax mopup in the first three quarters of this fiscal by 5.2% to ₹19.39 lakh crore.
Gross tax revenues jumped 32% in December, pushing up the year-on-year growth in the first three quarters of the fiscal to 9%, thanks to strong increases in collections of the corporation tax, customs duties and the integrated goods and services tax. Non-tax revenues expanded by 20.6% until December to ₹5.40 lakh crore, thanks to a record ₹2.69 lakh crore dividend transfer by the central bank. Total receipts increased 8.9% year-on-year until December to almost ₹25.3 lakh crore.
Meanwhile, the government has kept a lid on revenue expenditure, which grew just 1.8% until December to ₹25.93 lakh crore. However, capital spending rose by 15% in the first three quarters of the fiscal to ₹7.88 lakh crore even though there was a contraction in December after a frontloading of such productive expenditure to aid economic growth earlier in the year.Icra chief economist Aditi Nayar said, “We do not anticipate the FY26 revised estimate to indicate a higher fiscal deficit than the budget estimate.”
Going forward, Nayar expected the fiscal deficit to be pegged at 4.3% of GDP in FY27, only marginally lower than the 4.4% target for this financial year.