India’s fiscal deficit hit 21.2 per cent of the annual target in the June 2022 quarter, compared with 18.2 per cent in the year-ago period. In actual terms, the fiscal deficit stood at Rs 3.51 lakh crore at the end of the first quarter of 2022-23, according to the official data.
The fiscal deficit, which is the difference between the government’s total expenditure and revenue, is pegged at Rs 16.6 lakh crore or 6.4 per cent of the GDP for the full financial year 2022-23. It had stood at 6.71 per cent in the last financial year.
According to the data from the Controller General of Accounts (CGA) released on Friday, during April-June 2022, the Centre’s total expenditure stood at 9.48 lakh crore, which is 24 per cent of the corresponding BE 2022-23. It was at 23.6 per cent in the year-ago period.
The government’s total receipts during the June 2022 quarter was 5.96 lakh crore, or 26.1 per cent of the Budget Estimate (BE) for the financial year 2022-23. It had stood at 27.7 per cent in the corresponding period a year ago.
The government has received Rs 5,96,040 crore, comprising Rs 5,05,898 crore tax revenue (net to Centre), Rs 62,160 crore of non-tax revenue and Rs 27,982 crore of non-debt capital receipts. Non-debt capital receipts consist of ‘recovery of loans’ of Rs 3,423 crore and miscellaneous capital receipts of Rs 24,559 crore. A total of Rs 1,42,775 crore has been transferred to state governments as devolution of share of taxes by the government up to this period which is Rs 25,251 crore higher than the previous year.
The government’s total expenditure stood at Rs 9,47,911 crore. Out of this, Rs 7,72,847 crore is on the revenue account and Rs 1,75,064 crore is on capital account. Out of the total revenue expenditure, Rs 2,28,595 crore is on account of interest payments and Rs 67,980 crore is on account of major subsidies.
Sunil Kumar Sinha, principal economist at India Ratings and Research, said, “On the expenditure front, while the non-interest expenditure grew by just 3.5 per cent yoy, the capital expenditure grew by a robust 57.3 per cent yoy in 1QFY23. Ind-Ra believes that the sustained double-digit growth in capex will help the economy at a time when the private investment is in wait and watch mode due to the monetary tightening across the globe and the uncertainty created by the Russia-Ukraine conflict.”
Sinha also said the net-tax revenue grew 22.6 per cent in 1QFY23 over the same period last year. However, the non-tax revenue contracted 51.2 per cent yoy in the same period due to 69.4 per cent lower surplus transferred by the RBI to the union government. “As a result, the revenue receipts grew by a tepid 5.2 per cent during 1QFY23. Nevertheless, India Ratings and Research (Ind-Ra) believes elevated levels of inflation in the economy will boost the nominal GDP which in turn would help the government not only meet but exceed its tax collection targets of FY23.”
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