New Delhi: The government’s fiscal deficit narrowed to ₹17.33 trillion or 6.4% of GDP for the financial year ended March 2023 compared with the previous financial year, on the back of higher tax receipts.
Official data released on Wednesday showed that the deficit was lower than the revised estimate of ₹17.55 trillion given in the Union Budget 2023.
Total receipts for the fiscal stood at ₹ 24.56 trillion, which was slightly over the target, while expenditure was ₹41.89 trillion, meeting the target of the revised budget.
Revenue receipts were at ₹23.84 trillion of which tax revenue was ₹20.97 trillion, 100.5% of the revised estimates, but narrower than the 102.2% recorded in FY22. Non-tax revenue was ₹ 2.86 trillion, 109.3% of revised estimates, also narrower than 116.4% a year ago.
Revenue deficit was at ₹10.69 trillion, which at 96.2% fell short of FY23’s budget target. For April 2023, the fiscal deficit nearly doubled to ₹1.4 trillion or 7.5% of the FY24 estimates, up from ₹0.7 trillion in the first month of FY23.
Net tax revenues and non-tax revenues reported a sharp contraction of 13.9% and 8.2% respectively, even as revenue expenditure rose 15.2%.
A 0.6% fall in capex may have stemmed from unseasonal rains.
Economists noted that the government had earned more in both tax and non-tax revenue. Higher non-tax revenue from profits and dividends also helped to balance disinvestment proceeds that were lower by around ₹ 15,000 crore.
“Higher than budgeted dividend surplus transfer of ₹ 874.2 billion from the RBI is likely to provide some cushion to meet any undershooting in other revenues streams or overshooting in expenses, relative to respective budget estimates,” said Aditi Nayar, chief economist at ratings agency ICRA.
“This does give confidence that the numbers for FY24 will be according to plan and be met as there has been resolve shown in adhering to the budgetary targets,” said Bank of Baroda chief economist Madan Sabnavis.
For the full year, capex was marginally higher than projected which was enabled by reductions in expenditure in agriculture, consumer affairs and rural development, leading to savings of ₹28,000 crore.
The outlay on fertilizers was higher by around ₹26,000 crore, which was met by the savings mentioned above, Sabnavis noted.
ICRA said it expected the fertilizer budgetary allocation for FY24 to remain adequate at the current juncture after the government approved a subsidy of ₹380 billion towards P&K fertilizers for the FY24 kharif season.
Also, nutrient-based subsidy rates for the kharif season for key nutrients N, P, K and S have been revised downwards, in line with a fall in international fertilizer and key raw material prices.
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Updated: 31 May 2023, 11:19 PM IST