The Centre’s fiscal deficit target narrowed to 6.4 per cent for the fiscal year 2022-23 and met the Finance Ministry’s set target on the back of buoyant tax receipts and some fiscal headroom from lower payments. In absolute terms, the central government's fiscal deficit in 2022-23 was Rs 17.33 lakh crore as against the revised estimate of Rs 17.55 lakh crore.
At Rs 17.33 lakh crore, the fiscal deficit for 2022-23 amounts to 6.4 per cent of the GDP, data released by the Controller General of Accounts (CGA) showed on Wednesday.
Total receipts for fiscal 2023 stood at Rs 24.56 lakh crore, while overall expenditure was at Rs 41.89 lakh crore.
The data showed that the FY23 capital expenditure exceeded the government's revised target of Rs 7.28 lakh crore by Rs 8,551 crore.
Earlier, Finance Minister Nirmala Sitharaman had retained the country's aim to narrow the fiscal gap to 6.4 per cent of GDP from 6.7 per cent in the previous fiscal.
The Finance Ministry has set a target to further narrow the deficit for 2023-24 to 5.9 per cent, and 4.5 per cent of the GDP by 2025-26.
It is to be noted that the Centre borrows from the market to finance its fiscal deficit. The CGA data stated that the revenue deficit worked out to be 3.9 per cent of GDP, while the effective revenue deficit was 2.8 per cent of GDP.
Revenue receipts stood at Rs 23.84 lakh crore, of which tax revenue was Rs 20.97 lakh crore and non-tax revenue was Rs 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 Rs 46,035 crore in FY23, missing the revised target of Rs 60,000 crore.
Tax collection
According to CGA data, the direct tax collection stood at Rs. 16.61 lakh crore in the last fiscal year, which was higher than the revised target of Rs 16.5 lakh crore on the back of a resilient economy.
Gross GST collection in the last fiscal year rose 22 per cent on year to Rs 18.10 lakh crore and the average gross monthly collection for the full year was Rs 1.51 lakh crore.
"In FY2023, the GoI's net tax revenues reported a healthy growth of 15.2 per cent, amidst a 17.8 per cent contraction in non-tax revenues, 7.8 per cent increase in revenue expenditure, and a robust 24.2 per cent expansion in capex. Growth in gross tax revenues rose to a considerable 16.8 per cent in March 2023, boosted by corporation tax and personal income tax. Moreover, total expenditure grew by 7 per cent YoY in the month of March 2023, led by a healthy 36 per cent expansion in capital expenditure amidst a mild 1 per cent rise in revex in that month," said Aditi Nayar, Chief Economist and Head, Research and Outreach, ICRA.
Expenditure
On the expenditure side, The Centre has spent about Rs 5.31 lakh crore on major subsidies such as food, fertilisers and petroleum. This was 102 per cent of the revised annual aim, a little less than 103 per cent of budgeted expenditure in the comparable period last year.
The Centre transferred Rs 9.48 lakh crore to states as Devolution of Share of Taxes by the Government of India in the last financial year, which was Rs 50,015 crore higher than the previous year, according to CGA data.
Fiscal deficit for April 2023
The Centre's fiscal deficit during the month of April 2023, which is the first month of the current fiscal, came in at Rs 1.34 lakh crore. This is 7.5 per cent of the fiscal deficit target set for FY24.
Total receipts in the first month of this fiscal year stood at Rs 1.71 lakh crore rupees, while overall expenditure in April was at Rs 3.04 lakh crore. They were 6.3 per cent and 6.8 per cent of this fiscal year's budget target.
Revenue receipts stood at 1Rs .70 lakh crore, including tax revenue of Rs 1.59 lakh crore and non-tax revenue of Rs 10,958 crore.
The revenue deficit for the month of April was at Rs 55,780 crore or 6.4 per cent of the fiscal year's budget target, data showed.
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