Fiscal deficit touches 82.8% of full-year target in February: Govt data
Data released by the Controller General of Accounts (CGA) on Friday revealed that the fiscal deficit of the central government had reached 82.8% of the full-year target as of February. During the period of April-February, the fiscal deficit, or the gap between expenditure and revenue collection, stood at Rs 14.53 lakh crore. This is compared to 82.7% of the Revised Estimate (RE) in the Budget during the same period in 2021-22.
For the entire fiscal year of 2022-23, the government anticipates a deficit of Rs 17.55 lakh crore, which amounts to 6.4% of the GDP. The CGA data indicated that net tax collection during the first 11 months of the current fiscal year was Rs 17,32,193 crore, which is 83% of the RE for 2022-23. This figure is slightly lower than the collection during the same period in the previous fiscal year, which was 83.9% of the RE for 2021-22.
The government’s total expenditure during this period amounted to Rs 34.93 lakh crore, of which Rs 29,03,363 crore was spent on the Revenue Account and Rs 5,90,227 crore was spent on the Capital Account. Interest payments accounted for Rs 7,98,957 crore of the total revenue expenditure, while major subsidies amounted to Rs 4,59,547 crore.
According to Aditi Nayar, Chief Economist at rating agency Icra, the smaller incremental fiscal deficit in February this year as compared to February 2022 was due to lower tax devolution and subdued capex. Although there may be some variations in corporate tax, disinvestment receipts, and specific categories of expenditures following the supplementary demand for grants, Icra does not expect the fiscal deficit to significantly exceed the revised target of Rs 17.6 lakh crore for 2022-23.
In the Union Budget presented in the Lok Sabha on February 1, Finance Minister Nirmala Sitharaman pegged the fiscal deficit target for 2023-24 at 5.9% of the GDP. The deficit for the current fiscal year ending in March 2023 has been kept at 6.4% of the GDP. The government relies on market borrowing to finance its fiscal deficit and aims to reduce the fiscal deficit to below 4.5% of the GDP by 2025-26.
With agency inputs
