The Central government has received Rs 7,32,963 crore up to May in the current financial year, which is 21 per cent of the total receipts of the corresponding budget estimate for 2025-26 and reflects the strong fiscal position of the country, according to figures released by the Finance Ministry on Monday. 

The receipts comprise Rs 3,50,862 crore tax revenue (net to Centre), Rs 3,56,877 crore of non-tax revenue, and Rs 25,224 crore of non-debt capital receipts.

The Centre has transferred Rs 1,63,471 crore to state governments as devolution of share of taxes for this period, which is Rs 23,720 crore higher than the previous year, the statement said.

The total expenditure incurred by the Centre is Rs 7,46,126 crore (14.7 per cent of the corresponding BE 2025-26), out of which Rs 5,24,772 crore is on revenue account and Rs 2,21,354 crore is on capital account for projects in the highways, ports and railway sectors.

Out of the total revenue expenditure, Rs 1,47,788 crore is on account of interest payments and Rs 51,253 crore is on account of major subsidies, the statement explained.

Given that the government is off to a speedy start in FY26, with May and April 2025 data showing that revenue receipts are already at 21 per cent of the budgeted target, it is expected to meet its revenue targets this year.

With the strong emerging fiscal position in 2025-26, the government is likely to have some additional headroom to meet unforeseen expenditure such as defence, according to a Bank of Baroda report.

In its outlook for FY26, the report points out that the government has budgeted a fiscal deficit of 4.4 per cent of GDP, assuming 10.1 per cent growth in nominal GDP.

“We expect this growth to be around 11 per cent, as we believe real GDP will range between 6.4-6.6 per cent this year,” the report states. This is expected to provide additional fiscal space to the government.

The income tax cut is also expected to give a boost to consumption, which in turn will support indirect tax receipts, according to economists.

On the spending front, keeping up with past trends, the government has begun front-loading of expenditure from Q1 itself, with capex at an impressive figure of over 2.2 lakh crore.