Higher small savings inflows ease strain on govt borrowing

Subscribe to enjoy similar stories.New Delhi: The Centre's reliance on small savings to finance its budget deficit increased in the previous financial year, with collections under the National Small Savings Fund (NSSF) rising to ₹2.19 trillion in the 11 months to February 2026, said two government officials aware of the matter.The overall mobilization from these long-term, lock-in-based savings schemes such as Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana helped reduce pressure on market borrowing, even though monthly inflows remained uneven, the officials cited earlier said on the condition of anonymity.According to department of expenditure data reviewed by Mint, NSSF collections during the first 11 months of FY26 were nearly ₹30,000 crore higher than ₹1.89 trillion recorded in the same period of FY25.

The higher mobilization from these schemes provided the government with a stable and relatively low-risk source of funds to finance its fiscal deficit.The government had pegged FY26 fiscal deficit—the excess of expenditure over revenue that is financed through market borrowings—at 4.4% of gross domestic product, translating into ₹15.58 trillion.Queries emailed to the finance ministry on Monday remained unanswered till press time.Given that a large part of small savings flow typically comes in March due to year-end tax-saving-related investments, government officials expect collections to remain close to the revised estimate target of ₹3.72 trillion for FY26, which is higher than ₹2.59 trillion in FY25.The relatively higher and more stable year-to-date collections in FY26 suggest an improvement in overall financing conditions, even though short-term fluctuations persist,