new delhi, July 1 -- India's fiscal deficit reached 9.6% of the full-year target at the end of May. The fiscal deficit, reflecting the gap between expenditure and revenue financed by borrowing, had touched 21.4% of the Rs.16.96 lakh crore budget estimate (BE) for FY27 in April. The Centre's fiscal deficit narrowed to 9.6% of BE of 2026-27 or Rs.1.62 lakh crore, according to the latest accounts released by the Controller General of Accounts (CGA) on Tuesday. The government has budgeted a fiscal deficit of 4.3% of gross domestic product, or about Rs.16.96 lakh crore, for FY27 and is expected to rely on stronger tax collections and non-tax receipts in the coming months to keep the deficit within the target. May's fiscal position also reflects a combination of weaker receipts and front-loaded expenditure at the start of the financial year. Experts caution against reading too much into the first couple of months' data as direct tax collections, dividends from the RBI and public sector enterprises, and GST settlements are unevenly distributed through the year. According to the CGA, the amount the government received under the head 'dividends and profits' was Rs.2.89 lakh crore or 74% of the BE. The data on monthly accounts showed that the government received Rs.7.19 lakh crore, 19.7% of corresponding BE 2026-27 of total receipts, up to May 2026. This comprised Rs.3.48 lakh crore tax revenue (net to centre), Rs.3.51 lakh crore of non-tax revenue and Rs.19,664 crore of non-debt capital receipts. The decline in receipts follows the Centre's March decision to cut excise duty on petrol and diesel by Rs.10 per litre each to shield consumers from elevated global crude prices due to the war in West Asia, resulting in a revenue loss of nearly Rs.14,000 crore per month. Also, global uncertainty due to war in West Asia impacted trade and resulted in slowing IGST collections. At the same time, government spending also rose significantly. Total expenditure stood at 16% of BE upto May at Rs.8.81 lakh crore up from 15% of BE upto May in the year-ago period. Of the total expenditure, revenue expenditure rose to Rs.6.30 lakh crore up to May in FY27 from Rs. 5.25 lakh crore up to May in FY26, while capital expenditure increased to Rs. 2.5 lakh crore from Rs. 2.21 lakh crore up to May in previous year. The food subsidy expenditure reached 18% of budgeted amount to Rs. 40,800 crore upto May up from Rs.27,990 crore upto May in the previous fiscal FY26. The outgo upto May is in respect of FY27 budget allocation of Rs.2.28 lakh crore towards food subsidy, underscoring the government's continued focus on food security programmes....