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Informist, Tuesday, Mar. 10, 2026

 

By Priyasmita Dutta

 

NEW DELHI – The government expects to meet the revised fiscal deficit target of 4.4% of GDP in 2025-26 (Apr-Mar) despite the high net cash outgo in the second and final batch of Supplementary Demands for Grants, a top finance ministry official said Tuesday. Receipts from spectrum charges, which the government expects to collect "immediately", will bring the net demand down to a much lower level, the official told Informist. 

 

Earlier in the day, the government sought Parliament's approval to spend a net additional INR 2.01 trillion in the second batch of Supplementary Demands for Grants for the current financial year ending Mar. 31. On a gross basis, the government sought permission for additional spending of INR 2.81 trillion in the second batch, out of which INR 801.46 billion will be met from enhanced receipts or recoveries of the ministries and departments.

 

The net cash outgo under the second Supplementary Demands for Grants is much higher than the amount sought in the last few financial years, raising concerns about possible fiscal slippage. The government had sought INR 515 billion in the second batch of Supplementary Demands for Grants in FY25 and INR 787 billion in FY24.

 

For the current financial year, the government has set a fiscal deficit target of 4.4% of GDP. On an absolute basis, the fiscal deficit is projected at INR 15.59 trillion. The official said the government will meet the target as a percentage of GDP. However, since the nominal GDP in the new series, in absolute terms, is lower than the first advance estimate, the fiscal deficit will have to be lower by about 384 billion than the revised estimate to meet the target.

 

India's nominal GDP for FY26 is estimated at INR 345.47 trillion under the new series, down from INR 357.14 trillion previously assumed. This has pushed up fiscal deficit as a percentage of GDP to 4.5%, 11 basis points higher than 4.4% projected in the Budget.

 

According to the official, the telecom receipts will help the government meet the fiscal deficit as a percentage of GDP. The Budget has projected the government's receipts from the telecom sector at INR 1.78 trillion, more than double the INR 848 billion collected in FY25. Telecom receipts mainly consist of licence fees and spectrum usage charges from telecom operators. 

 

The licence fee is levied at 8% of the adjusted gross revenue of telecom companies, accounting for 14-17% of their total expenditure, such as Bharti Airtel Ltd. and Vodafone Idea Ltd.   End

 

Edited by Saji George Titus

 

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