Centre’s fiscal deficit narrows to 6.4 pc of GDP in FY23

New Delhi,: The Centre’s fiscal deficit narrowed to 6.4 per cent of the GDP in 2022-23 from 6.71 per cent in FY22, as anticipated by Finance Minister Nirmala Sitharaman in her Budget in February this year.

In the Union Budget, the government aimed to further bring down the fiscal deficit — a key indicator of borrowing — during the current financial year 2023-24 to 5.9 per cent of the gross domestic product (GDP).

Unveiling the revenue-expenditure data of the Union government for 2022-23, the Controller General of Accounts (CGA) said the fiscal deficit in absolute terms was Rs 17,33,131 crore (provisional), marginally down from the amount projected in the Revised Estimates (RE) in the Budget.

CGA said the government received Rs 24.56 lakh crore (101 per cent of corresponding RE 2022-23 of total receipts) during 2022-23.

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.

Non-debt capital receipts consist of the recovery of loans and miscellaneous capital receipts.

About Rs 9.48 lakh crore has been transferred to state governments as devolution of taxes by the central government, which is Rs 50,015 crore higher than the previous year (2021-22).

The CGA data further revealed that the Centre’s total expenditure was Rs 41.89 crore (100 per cent of corresponding RE 2022-23), out of which Rs 34.52 lakh crore was on the revenue account and Rs 7.36 lakh crore on the capital account.

Out of the total revenue expenditure, Rs 9.28 lakh crore was on account of interest payments and Rs 5.31 lakh crore towards major subsidies.

As per CGA, the revenue deficit for the fiscal ending March 2023 was 3.9 per cent of GDP while the effective revenue deficit worked out to be 2.8 per cent of GDP.

Aditi Nayar, Chief Economist and Head – Research and Outreach, Icra, said the government was able to restrict its FY2023 fiscal deficit at Rs 17.3 lakh crore, a shade below the FY2023 RE, with higher than estimated revenue receipts and a small undershooting in revenue expenditure, offsetting the disinvestment miss and a healthier than expected capex.

“In FY2023, the government’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,” she said.

Meanwhile, another set of CGA data showed that the fiscal deficit in the first month of the current fiscal was 7.5 per cent of the Budget Estimate, up from 4.5 per cent recorded in April 2022. In absolute terms, the deficit was Rs 1.33 lakh crore.