At ₹9.93 lakh crore, India's April-Dec fiscal deficit widens to 59.8% of FY23 target
2 min read . Updated: 31 Jan 2023, 07:03 PM IST
Premium- In actual terms, the fiscal deficit was ₹9.93 lakh crore during the April-December period of 2022-23
The Central Government's fiscal deficit in December-end touched 59.8 per cent of the full year Budget Estimate, according to the Ministry of Finance's data released on Tuesday.
In actual terms, the fiscal deficit, which is the difference between expenditure and revenue, was ₹9.93 lakh crore during the April-December period of 2022-23.
The fiscal deficit widened from 50.4% reported in the corresponding period of last year.
Net tax receipts rose to ₹15.56 lakh crore while total expenditure was ₹28.18 lakh crore, the government data showed.
The government has budgeted fiscal deficit to be ₹16.61 lakh crore or 6.4 per cent of the GDP in the current year ending March 2023. The deficit is funded by market borrowings.
ICRA Chief Economist Aditi Nayar said, "With a typical surge in receipts in the last quarter, and a cushion provided by an assessed YoY decline in tax devolution, we expect the overshoot in the GoI's fiscal deficit to be limited to Rs. 0.8 trillion relative to the FY2023 BE, with the target of 6.4% of GDP likely to be met.
Growth in the gross tax revenues stood at a marginal 0.8% in December 2022, dampened by personal income tax and excise duty. We estimate that the amount that remains to be disbursed to the states in the last quarter, will be around Rs. 1.0 trillion lower than the transfer of Rs. 4.3 trillion in Q4 FY2022, offering a cushion in the remainder of this year. The net tax receipts of the GoI have reached 80% of the FY2023 BE in the first nine months, reinforcing our estimate of a healthy overshoot relative to the budgeted level, largely on account of direct tax collections and GST inflows."
Union Finance Minister Nirmala Sitharaman will present the budget for the next financial year tomorrow, where she is widely expected to say that India would meet its fiscal deficit target of 6.4% for the current year.
The government is widely expected to deliver a growth-oriented budget, while resisting the temptation to turn populist. Economists surveyed by Bloomberg see FM Sitharaman relying on asset sales and cutting subsidies to maintain infrastructure expenditure and contain the fiscal deficit.
The government is seen borrowing a record ₹15.8 lakh crore in the next fiscal year starting April to partly meet its spending requirements. Shorter-dated Indian bonds erased some of the losses after dropping Monday on worries the government may raise its current fiscal year’s borrowings from ₹14.2 lakh crore.
The rupee may remain under pressure from further interest-rate hikes by the US Federal Reserve, but slowing global growth may push down commodity prices and improve India’s current account balance, the government survey said.
