Fiscal deficit narrows to 6.4%, meets budgeted target

The finance minister has pegged the fiscal deficit for the current financial year at 5.9% and proposed to bring it down to 4.5% by 2025-26

India’s fiscal deficit, a key indicator of the government’s borrowing, narrowed to 6.4 per cent of GDP in 2022-23 from 6.71 per cent in the previous year on the back of buoyant tax receipts, as per official data released on Wednesday.

In the Union Budget Finance Minister Nirmala Sitharaman had proposed to bring down the fiscal deficit to 6.4 per cent in the financial year ended March 2023. The actual deficit number is in line with the budgetary estimate.

The finance minister has pegged the fiscal deficit for the current financial year at 5.9 per cent and proposed to bring it down to 4.5 per cent by 2025-26.

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“India is on track to achieve the fiscal deficit target of 5.9 per cent of GDP in 2023-24,” said Chief Economic Adviser V Anantha Nageswaran.

According to data released by the Controller General of Accounts (CGA), the fiscal deficit in absolute terms stood at Rs 17.33 lakh crore in the year ended March 2023.

The central government received Rs 24.56 lakh crore in 2022-23, which is 101 per cent of the revised estimate announced in the budget. It comprised Rs 20.97 lakh crore tax revenue (net to centre), Rs 2.86 lakh crore of non-tax revenue and Rs 72,187 crore of non-debt capital receipts.

Gross GST collection during the year surged by 22 per cent to Rs 18.10 lakh crore. Mop up from direct taxes during the year stood at Rs 16.61 lakh crore, which is higher than the revised target of Rs 16.5 lakh crore.

Non-debt capital receipts consist of recovery of loans (Rs 26,152 crore) and miscellaneous capital receipts (Rs 46,035 crore).

According to a statement released by the union finance ministry, Rs 9,48,406 crore has been transferred to state governments as devolution of share of taxes by the Government of India upto this period which is Rs 50,015 crore higher than the previous year.

Total expenditure incurred by the Government of India during the financial year ended March 2023 stood at Rs 41.88 lakh crore. Out of which Rs 34.52 lakh crore is on revenue account and Rs 7.36 lakh crore is on capital account.

Out of the total revenue expenditure, Rs 9,28,424 crore is on account of interest payments and Rs 5,30,959 crore is on account of major subsidies, the finance ministry said.