Centre's Apr-Oct fiscal deficit widens to ₹7.58 lakh crore of FY23 target
2 min read 30 Nov 2022, 04:18 PM ISTFor fiscal 2022-23, the fiscal deficit of the government is estimated to be ₹16.61 lakh crore or 6.4% of the GDP
PremiumIndia's fiscal deficit widened to ₹7.58 lakh crore in April to October, accounting for 45.6% of annual estimates, official data revealed on Wednesday. For fiscal 2022-23, the fiscal deficit of the government is estimated to be ₹16.61 lakh crore or 6.4% of the GDP.
Net tax receipts surged to ₹11.71 lakh crore while the total expenditure came in at ₹21.44 lakh crore, the government data stated.
The fiscal deficit for April to October last year had accounted for 36.3% of the FY22 aim. In the April to September period, fiscal deficit had widened to touch ₹6.20 lakh crore accounting for 37.3% of annual estimates.
The fiscal deficit had widened to 9.3% in FY21 as the pandemic hit revenues and increased relief spending. The surge in savings in the economy, as the Covid-related lockdowns brought investments and consumption to near halt, had helped finance the widened deficit. But now the economy is returning to normal.
In February this year, while presenting the annual budget, Union Finance Minister Nirmala Sitharaman set the fiscal deficit target at 6.4% of GDP for FY23 starting April, compared to 6.7% in the previous financial year.
ICRA chief economist Nayar on GoI fiscal
“In April-October FY2023, while the government's net tax revenues reported a healthy growth of 11%, the 14% contraction in non tax revenues, combined with the 10% rise in revenue expenditure, and the robust 62% expansion in capex, widened the fiscal deficit to ₹7.6 trillion in April-Oct FY2023 from ₹5.5 trillion in the first seven months of FY2022," said Aditi Nayar, Chief Economist, ICRA.
Nayar said, “We expect the gross tax revenues in FY2023 to exceed the BE by a considerable ₹3.1 trillion. Following the double-tranche of taxes devolved to the state governments in November 2022, we estimate that ₹3.8 trillion remains to be disbursed to the states in the last four months, based on our estimate of the FY2023 gross tax revenues."
The economist added, “At present, we expect the upside to total expenditure in FY2023 over the budget estimates (BE) at ₹2.5-3.0 trillion, largely stemming from subsidies, although this would be partly cushioned by expenditure savings by various ministries/depts."
“Taking into account the estimated additional expenditure that is likely in FY2023, we estimate the extent of the overshoot in the fiscal deficit at a modest ₹1 trillion, given the considerable upside seen in non-excise tax revenues as well as savings expected under other expenditure heads. The fiscal deficit in FY2023 is unlikely to exceed the budgeted 6.4% of GDP, on a higher nominal GDP (ICRA exp: +15%) vis-à-vis what was indicated in the budget (+9.1%)."
India's Q2 FY23 GDP data
Domestic GDP data for the second quarter, is also scheduled to be released later in the day.
The data would elaborate on the expansion of different sectors like agriculture and manufacturing in the first quarter of this financial year.
Many analysts believe the Indian economy will expand at a single-digit rate mainly due to the waning base effect.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
