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India fiscal deficit, year by year — Centre, States & combined

Q: What is India's combined fiscal deficit as a percentage of GDP?

India's combined (Centre plus States) gross fiscal deficit was roughly 13.3% of GDP in FY2020-21 at the COVID-19 peak, and has narrowed since to around 9.4-9.6% in FY2021-22 and FY2022-23, about 8.5% in FY2023-24 and an estimated 7.5-7.7% in FY2024-25. The central government's own deficit was about 4.8% of GDP in FY2024-25 and is budgeted near 4.4% for FY2025-26. These figures are approximate and revised periodically.

Q: Why is the combined deficit less than the Centre's plus the States' deficit?

The combined fiscal deficit is not a simple sum of the central and state deficits because transactions between the two layers of government are netted out. For example, the Centre's loans and advances to states appear as spending for the Centre and borrowing for the states; counting both would double-count. The RBI's Handbook of Statistics publishes the consolidated combined GFD after removing these inter-governmental flows, which is why it is lower than adding the two headline numbers.

Q: Why does the fiscal deficit matter for banks and the RBI?

A large fiscal deficit means heavy government borrowing through dated securities and treasury bills, which banks are the biggest buyers of. More supply of government bonds tends to push up G-Sec yields and the cost of funds, can crowd out private credit, and feeds into banks' SLR holdings and mark-to-market on their bond books. The RBI also manages this borrowing and watches the deficit alongside inflation, so the fiscal path interacts with monetary policy, liquidity and the rupee.

Quick answerIndia’s combined (Centre+States) fiscal deficit peaked near 13.3% of GDP in FY2020-21 during COVID-19, then narrowed to about 9.6% (FY2021-22), 9.4% (FY2022-23), 8.5% (FY2023-24) and an estimated ~7.7% in FY2024-25. The Centre’s own deficit fell from 9.2% to about 4.8% and is budgeted near 4.4% for FY2025-26; the States run roughly 2.6-3.2%. The combined figure is not a simple sum — inter-governmental flows are netted out. Heavy borrowing feeds G-Sec yields and bank liquidity. Figures are approximate and revised periodically.

The chart shows gross fiscal deficit (% of GDP) for the Centre, the States combined and the Centre+States combined; the table below carries the same figures so the page is readable without JavaScript — for accessibility and AI answer engines.

Gross fiscal deficit (% of GDP)

Fiscal year	Centre	States	Combined	Note
FY2019-20	4.6%	2.6%	7.2%	Pre-pandemic; Centre slipped on weak revenue
FY2020-21	9.2%	4.1%	13.3%	COVID-19 peak — record combined deficit
FY2021-22	6.7%	2.8%	9.6%	Recovery; consolidation begins
FY2022-23	6.4%	2.8%	9.4%	Gradual glide-path consolidation
FY2023-24	5.6%	3.0%	8.5%	Centre beat target; capex-led
FY2024-25	4.8%	3.2%	7.7%	Provisional / RE, subject to revision

Centre figures are Union Budget actuals (FY2024-25 provisional / revised estimate); State and combined figures are approximate, drawn from the RBI State Finances study and Handbook of Statistics and are revised in later vintages. The combined GFD is consolidated (inter-governmental transactions netted out), so it is lower than Centre + States added together. For exact latest figures see the sources linked below.

What it means for bankers

The fiscal deficit is, in effect, the size of the government’s borrowing programme — and banks are its largest financiers. A wider deficit means more issuance of dated G-Secs and T-bills, which tends to push up yields and the cost of funds, can crowd out private credit, and lifts banks’ SLR bond holdings and their mark-to-market sensitivity. The record FY21 combined deficit during COVID, and the consolidation since, map closely onto the swing in 10-year yields and system liquidity. The RBI runs the borrowing calendar and weighs the fiscal path against inflation when setting the repo rate, so fiscal and monetary policy are tightly linked.

Key terms in this dataPlain-English definitions of the terms behind this dashboard — see the full Indian banking glossary. SLR · Repo rate

More live dataExplore BankPulse’s other live RBI dashboards: G-Sec Yields · Real GDP Growth · Current Account / CAD · Liquidity Operations.

India fiscal deficit FAQ

What is the fiscal deficit?

The fiscal deficit is the gap between a government's total expenditure and its total receipts excluding borrowings, in a financial year — i.e. how much it must borrow to meet its spending. It is usually shown as a percentage of GDP. India reports it for the Centre, for the States combined, and as a Centre+States combined figure.

What is India's combined fiscal deficit as a percentage of GDP?

India's combined (Centre+States) gross fiscal deficit was roughly 13.3% of GDP at the FY2020-21 COVID peak, narrowing to about 9.4-9.6% in FY2021-22 and FY2022-23, ~8.5% in FY2023-24 and an estimated ~7.5-7.7% in FY2024-25. The Centre's own deficit was about 4.8% in FY2024-25 and is budgeted near 4.4% for FY2025-26. Figures are approximate and revised periodically.

Why is the combined deficit less than the Centre's plus the States' deficit?

Because transactions between the two layers of government are netted out. The Centre's loans to states are spending for the Centre and borrowing for the states; counting both double-counts. The RBI's Handbook of Statistics reports the consolidated combined GFD after removing these inter-governmental flows, so it sits below the simple sum.

Why does the fiscal deficit matter for banks and the RBI?

A large deficit means heavy government borrowing via G-Secs and T-bills — and banks are the biggest buyers. More bond supply tends to lift G-Sec yields and the cost of funds, can crowd out private credit, and affects banks' SLR holdings and mark-to-market. The RBI manages the borrowing programme and watches the deficit alongside inflation, so fiscal and monetary policy interact.

Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable fiscal-deficit JSON feed.

Last reviewed 19 Jun 2026 by Vikram Jain

Source: Union Budget documents (indiabudget.gov.in), RBI Handbook of Statistics on the Indian Economy and RBI “State Finances: A Study of Budgets”, rbi.org.in. Figures are official estimates, revised periodically (BE → RE → provisional → actual); we never reproduce source text verbatim. Reviewed by Vikram Jain. Last updated 19 Jun 2026, 03:30 IST.