The Ministry of Finance has published the consolidated monthly accounts of the Union Government of India for the period ending August 2026, the second month of the financial year 2026-27. The review shows the government’s tax collection, non-tax revenue, expenditure and transfers to states during this period.
Key facts
- Total receipts up to August 2026: ₹13,67,709 crore (37.5% of the budget estimate for the full year)
- Tax revenue received (net to Centre): ₹8,37,921 crore
- Non-tax revenue: ₹4,54,549 crore
- Non-debt capital receipts: ₹75,239 crore
- Total expenditure: ₹20,77,958 crore (38.9% of the budget estimate)
- Revenue account spending: ₹15,68,009 crore
- Capital account spending: ₹5,09,949 crore
- Interest payments: ₹5,14,810 crore of revenue expenditure
- Major subsidies: ₹1,87,037 crore of revenue expenditure
- Tax share transferred to states: ₹5,90,391 crore (₹60,243 crore lower than the same period last year)
Revenue receipts: tax and non-tax income
The government collected ₹13,67,709 crore in total receipts during the first two months of the financial year. This comprises three main sources. Tax revenue, after accounting for the share due to state governments, brought in ₹8,37,921 crore to the Centre. Non-tax revenue, which includes fees, charges, dividends and other sources, contributed ₹4,54,549 crore. Non-debt capital receipts, mainly from the sale of assets and recovery of loans, added ₹75,239 crore. Together, these receipts represent 37.5 per cent of the total budgeted receipts for the entire year, suggesting the government is on track with its revenue collection plans at this early stage.
Tax devolution to states has decreased
Under India’s federal structure, the Union Government transfers a share of tax revenue to state governments. During the August 2026 period, the Centre transferred ₹5,90,391 crore to states as their constitutional share of taxes. However, this amount was ₹60,243 crore lower than the corresponding period in the previous financial year, representing a decline in the nominal amount transferred, though this may reflect variations in overall tax collection and the growth rate of the economy.
Total government spending: revenue and capital
Against the receipts, the Union Government spent ₹20,77,958 crore up to August 2026. This represents 38.9 per cent of the budgeted expenditure for the full year. The spending split into two broad categories: revenue expenditure and capital expenditure. Revenue expenditure, which includes salaries, pensions, interest, subsidies and day-to-day operational costs, accounted for ₹15,68,009 crore. Capital expenditure, which funds infrastructure, assets and development projects, was ₹5,09,949 crore. The capital spending at this stage is slightly lower as a proportion than revenue spending, which is typical in the early months of the financial year.
Interest payments and major subsidies
Within the revenue expenditure, two large items stand out. Interest payments on government borrowings consumed ₹5,14,810 crore, representing the cost of servicing India’s public debt. Major subsidies, which the government provides to support prices of essential commodities and provide welfare benefits, cost ₹1,87,037 crore. Together, these two items account for a significant portion of the revenue budget and reflect the government’s obligation to meet interest commitments and maintain welfare and subsidy programmes.
What this means for you
These monthly accounts help track whether the government is meeting its budgeted revenue and spending targets. If tax collection falls significantly short or spending exceeds projections, it may affect the government’s ability to fund projects, maintain subsidies or social welfare schemes. For states, the decline in tax devolution may have implications for their budgets and ability to fund local programmes. Citizens, particularly those dependent on subsidies or public services, are affected by how efficiently the government manages its receipts and spending.