ICRA Sees India FY27 Fiscal Deficit Rising to 4.7% as April Gap Widens to ₹3.6 Trillion
Updated
Updated · Fibre2fashion.com · Jun 5
ICRA Sees India FY27 Fiscal Deficit Rising to 4.7% as April Gap Widens to ₹3.6 Trillion
2 articles · Updated · Fibre2fashion.com · Jun 5
Summary
India’s fiscal deficit widened to ₹3.6 trillion in April 2026 from ₹1.9 trillion a year earlier, prompting ICRA to project a FY27 deficit of about 4.7% of GDP versus the 4.3% budget target.
ICRA linked the slippage to a weaker start for revenues and higher spending, with West Asia conflict risks likely to lift fertiliser and fuel subsidies, cut excise collections and reduce dividend payouts from oil marketing companies.
Under ICRA’s baseline, crude at $95 a barrel would push the deficit near 4.7%, while an average of $105 could take it to 5% of GDP.
FY26 had ended better than the revised estimate because ₹0.6 trillion of spending cuts more than offset a ₹0.4 trillion revenue shortfall, even as gross tax revenue growth slowed to 6% and capital expenditure missed target at ₹10.7 trillion.
Higher small-savings inflows and stronger government cash balances could still limit the need for additional market borrowing in FY27.