The government's fiscal deficit could see a short-term increase due to proposed changes in the Goods and Services Tax (GST) structure, but the growth boost is expected to outweigh the temporary slippage, according to a report by Emkay Research.
The combined fiscal deficit of 24 Indian states, representing nearly 92 per cent of the country's GDP, reached Rs 1.5 trillion or 1.8 per cent of GSDP in the first quarter of 2025-26 - April-June, according to a report by ICICI Bank Global Markets.
India has made a promising start to the financial year 2025-26 (FY26), as both fiscal consolidation and capital expenditure (capex) are moving forward together, according to a report by Union Bank of India.
States and Union Territories combined will raise about Rs 2.86 lakh crore from markets in the quarter July-September 2025, the Reserve Bank of India (RBI) has indicated.
The central government has extra space in the fiscal deficit to push up expenditure by at least Rs. 0.8 trillion in FY2026 relative to the Budget Estimates (BE), as the higher GDP and RBI dividend payout provide room for it, according to a report by ICRA.
The fiscal deficit of the central government could ease by 20 to 30 basis points from the budgeted level of 4.5 per cent to 4.2 per cent of GDP by the bumper dividend transfer by Reserve Bank of India, according to a report by State Bank of India
Commission Chairman Dr Arvind Panagariya said, "If there is a balanced fiscal deficit in any developing state, then it is not a bad situation. It is important to take care that this deficit does not increase."
India's overall exports, including merchandise and services, witnessed a rise sharply to USD 73.80 billion in April 2025, marking a 12.7 per cent increase from USD 65.48 billion in the same month last year, according to data released by the Commerce Ministry on Wednesday.
The report says that the states are likely to spend less in the Financial Year (FY) 2025, to check the fiscal deficit-to-GDP ratio (by 20-30bps) than the budgeted 3.2 per cent.
"By keeping fiscal deficit and total outstanding liabilities within the limits mandated under Karnataka Fiscal Responsibility Act, we have maintained fiscal discipline in the financial year 2025-26," as per the Budget.