Non-tax revenue to help meet fiscal deficit goal

India is looking to maintain fiscal discipline backed by higher non-tax revenue, despite simmering global trade tensions and a potential spike in defence spending.

- Rhik Kundu & Subhash Narayan

NEW DELHI:

The centre aims to achieve the fiscal deficit target of 4.4% of gross domestic product (GDP) in FY26 despite uncertainties, two people aware of the discussions said. India's fiscal deficit in FY25 stood at 4.8% of GDP under revised estimates.

The Union budget had set a non-tax revenue target of ₹5.83 lakh crore—₹47,738 crore from interest receipts, ₹3.25 lakh crore from dividends and profits comprising contributions from the central bank, state-run banks, central public sector enterprises (CPSEs), and ₹2.07 lakh crore from other non-tax sources.

"This reflects a calibrated fiscal strategy anchored in revenue strength rather than expenditure cuts," the first of the two people said on the condition of anonymity.