Fiscal deficit at 6.4 percent of GDP in last financial year, Target to limit at 5.9 percent

Finance Ministry

New Delhi: The fiscal deficit of the central government stood at 6.4 percent of the gross domestic product (GDP) in the last financial year 2022-23. This is in line with the revised estimate of the Finance Ministry. This information was received from the government data released on Wednesday. The Controller General of Accounts (CGA), while releasing the revenue-expenditure data of the Central Government for 2022-23, said that the fiscal deficit in terms of value has been Rs 17,33,131 crore (provisional). This is slightly less than the revised estimate of the budget.

The government borrows from the market to bridge its fiscal deficit. The CGA said the receipts of the government stood at Rs 24.56 lakh crore in 2022-23. This is 101 percent of the revised estimate of total receipts for 2022-23. This includes tax revenue of Rs 20.97 lakh crore, non-tax revenue of Rs 2.86 lakh crore, and non-debt capital receipts of Rs 72,187 crore.

Non-debt capital receipts include loan recoveries and miscellaneous capital receipts. The central government has transferred around Rs 9.48 lakh crore to the state governments as their share in taxes. This is Rs 50,015 crore more than in 2021-22. The CGA data shows that the Centre’s total expenditure has been Rs 41.89 lakh crore, which is 100 percent of the revised estimate for 2022-23.

Of this, Rs 34.52 lakh crore is in the revenue account and Rs 7.36 lakh crore is in the capital account. Of the total revenue expenditure, Rs 9.28 lakh crore has been spent on interest payments and Rs 5.31 lakh crore on major subsidies. The CGA said the revenue deficit stood at 3.9 percent of GDP. At the same time, the effective revenue deficit has been 2.8 percent of GDP.

Finance Ministry

Finance Minister Nirmala Sitharaman has set a target of limiting the fiscal deficit to 5.9 percent of GDP in 2023-24 in the general budget presented on February 1. ICRA Chief Economist Aditi Nayar said the government has been able to contain the fiscal deficit at Rs 17.3 lakh crore for the last fiscal. This is slightly less than the revised estimate of 2022-23.

She said that the net tax revenue of the government has increased by 15.2 percent in the last financial year while non-tax revenue has decreased by 17.8 percent. Revenue expenditure has increased by 7.8 percent while capital expenditure has increased by 24.2 percent.

Meanwhile, another data from the CGA shows that the fiscal deficit in the first month of the current financial year stood at 7.5 percent of the budget estimate. This is more than 4.5 percent in April 2022. In terms of value, it works out to Rs 1.33 lakh crore.