Fiscal Deficit at 1.8% of GSDP

The combined fiscal deficit of 24 Indian states, representing nearly 92% of the country's GDP, was recorded at Rs 1.5 trillion, or 1.8% of their gross state domestic product (GSDP) in the April–June quarter of FY26, as per ICICI Bank Global Markets.

Revenue Receipts Rebound

Revenue receipts saw a 6.5% year-on-year growth, recovering from a 0.3% contraction in the same quarter last year. This rebound was fueled by stronger Own Tax Revenue (OTR), with significant gains across all major heads except excise duty.

Capex Jumps 28%

On the expenditure front, revenue expenditure remained broadly flat, but capital expenditure (capex) witnessed a remarkable 28% surge in Q1, marking a stark reversal from the 22% decline in the previous year.

June 2025 Data Highlights

June 2025 data underscored the base effect, with total receipts up by 16.8% year-on-year and revenue receipts increasing by 15.6%. Tax revenue climbed 14.3%, propelled by a 28% jump in OTR.

SGST Collections Spike

SGST collections experienced a 37.5% spike, bolstered by post-IGST and input tax credit settlements from prior months. Meanwhile, transfers from the Centre rose by 42% year-on-year in June, with grants-in-aid up nearly 50% to Rs 33,200 crore.