India's FY23 fiscal deficit narrows to 6.4% of GDP, meets government target
The government's fiscal deficit for the last financial year ended March 31, 2023 narrowed to 6.4 percent of gross domestic product (GDP),
PremiumThe government's fiscal deficit for the last financial year ended March 31, 2023 narrowed to 6.4 percent of gross domestic product (GDP), from a year earlier, and also met the government's target, supported by buoyant tax receipts and some fiscal headroom from lower payments.
While announcing the budget for the current financial year, Finance Minister Nirmala Sitharaman, in the Lok Sabha on February 1, had retained India’s aim to narrow the fiscal gap to 6.4 per cent of GDP from 6.7 per cent in the last financial year, the fiscal deficit target for 2023-24 was pegged at 5.9 per cent of the GDP.
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At ₹17.33 lakh crore, the fiscal deficit for FY23 amounts to 6.4 per cent of the GDP. However, in absolute terms, it is lower than the revised estimate of ₹17.55 lakh crore by ₹22,188 crore, data released by the Controller General of Accounts showed on Wednesday. Total receipts for fiscal 2023 stood at ₹24.56 lakh crore, while overall expenditure was at ₹41.89 lakh crore.
The data showed that the FY23 capital expenditure exceeded the government's revised target of ₹7.28 lakh crore by ₹8,551 crore. The revenue receipts stood at ₹23.84 lakh crore, of which tax revenue was ₹20.97 lakh crore and non-tax revenue was ₹2.86 lakh crore.
Tax and non-tax revenues were 100.5 per cent and 109.3 per cent of the revised estimates, which were lowered than 102.2 per cent and 116.4 per cent in the year-earlier period. However, the government missed the disinvestment targets. The proceeds came at ₹46,035 crore in FY23, missing the revised target of ₹60,000 crore.
Expenditure in the first month of the financial year was 10.6 per cent higher than a year ago, while net tax collections were 14 per cent lower than last year.
Separate government data released on Wednesday showed that India's gross domestic product or GDP grew by 6.1 per cent in the fourth quarter of fiscal year 2022-23, compared to a growth of 4.4 per cent growth in the previous October-December quarter.
Also, the growth in eight core infrastructure industries moderated to 3.5 per cent in April on an annual basis after hitting a five-month low of 3.6 per cent in March due to a decline in the output of crude oil, natural gas, refinery products and electricity.
Another set of Controller General of Accounts (CGA) data showed that the fiscal deficit in the first month of the current fiscal was 7.5 per cent of the Budget Estimate, up from 4.5 per cent recorded in April 2022. In absolute terms, the deficit was ₹1.33 lakh crore.
India has targeted a budget deficit of 5.9 per cent for the fiscal year that started April 1. "Higher than budgeted dividend surplus transfer of 874.2 billion rupees from the Reserve Bank of India is likely to provide some cushion to meet any undershooting in other revenues streams or overshooting in expenses, relative to respective budget estimates," said Aditi Nayar, an economist at ICRA.
Meanwhile, the Reserve Bank of India (RBI), in its recent board meeting, approved the transfer of ₹87,416 crore as a dividend to the government for the fiscal year 2022-23.
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