India's Fiscal Deficit Widens in April-July Amid Capex Surge

This signals govt's continued push to support economic growth through public investment

- Subhash Narayan

India's fiscal deficit nearly doubled in the first four months of FY26, compared with the same period of the previous year, driven by a sharp rise in capital expenditure, signaling the government's continued push to support economic growth through public investment.

The fiscal deficit for April-July was ₹4.68 trillion, or 29.9% of the full-year estimate, data released by the Controller General of Accounts (CGA) on Friday showed. The fiscal deficit was ₹2.77 trillion in the same period last year.

The surge had been maintained amid a ramp-up in Union government capex, which rose to ₹3.47 trillion in the April-July period, 31% of the annual goal, compared to ₹2.61 trillion a year earlier.

While the fiscal gap has widened, the year-on-year comparison is partly skewed due to the 2024 general election, which slowed spending in the early months of the previous fiscal year. This year's outlay suggests a frontloading of investments in infrastructure and public services even as private sector capex remains uneven.