India’s fiscal deficit hit 20.5 per cent of the full financial year 2022-23 target till the end of July. It is lower than the 21.3 per cent recorded in the corresponding period last year (April-July 2021). In the absolute terms, the fiscal deficit stood at Rs 3.41 lakh crore during April-July 2022, according to the latest official data.
For the full financial year 2022-23, the fiscal deficit (which is the difference between the government’s total expenditure and revenue) is pegged at Rs 16.6 lakh crore or 6.4 per cent of the GDP. It had stood at 6.71 per cent in the last financial year.
According to the latest data from the Controller General of Accounts (CGA) released on Wednesday, the government’s total expenditure during April-July 2022 stood at Rs 11.26 lakh crore, which is 28.6 per cent of the corresponding BE 2022-23. It had stood at 28.8 per cent in the year-ago period.
India’s total receipts during the April-July 2022 period stood at Rs 7.86 lakh crore, which is 34.4 per cent of the total budget estimate for FY23. The receipts in the corresponding period last year was at 29.9 per cent of that year’s BE.
India’s tax revenue during April-July 2022 stood at Rs 6,66,212 crore, which is 34.4 per cent of the Budget Estimate for FY23. Total non-tax revenue was Rs 89,583 crore, which is 33.2 per cent of BE as against 57.6 per cent of the BE reported a year ago.
Sunil Kumar Sinha, principal economist at India Ratings and Research, “The Union government’s gross tax revenue remained buoyant during April-July 2022 and grew 24.94 per cent on a strong base of April-July 2021 (y-o-y growth of 83.1 per cent). In comparison to April-July 2019 (pre-COVID-19), gross tax revenue grew at a CAGR of 17.3 per cent. Three-year CAGR is led by a strong growth in corporate tax (30.5 per cent), income tax (23.4 per cent), central GST (18.5 per cent) and union excise duty (15.8 per cent). However, excise duty collection growth in FY23 (April-July) showed negative (-15.2 per cent) due to high base and excise duty cut.”
He added that April-July 2022 net tax revenue growth remained strong at 25.9 per cent (budgeted growth: 9.6 per cent). In first four month of FY23 net tax revenue were 34.4 per cent of budget estimate (FY22: 30 per cent, FY21: 14.2 per cent).
“Based on present growth and inflation trend, Ind-Ra expects the union government to exceded its FY23 net tax revenue target (Rs 19.347 lakh crore). Non-tax revenue collections in first four months was 33.2 per cent of its FY23 budget target. The disinvestment may pose a challenge to union government finances and if envisaged disinvestment does not go through,” Sinha said.
He also said that revenue expenditure growth, on the other hand, has been low and in first four months of FY23, revenue expenditure growth has been 4.8 per cent (28.1 per cent of BE), non-interest revenue contracted by 2.5 per cent (FY22: -12.6 per cent). On the other hand, capex growth has been strong, it grew 62.5 per cent in April-July FY23 (April-July FY22: 14.8 per cent). Revenue and capital expenditure in first four month of this fiscal was 28.1 per cent and 27.8 per cent respectively of budget estimate.
“Relatively stronger receipt growth compared to weak expenditure growth in July 2022 has resulted in fiscal deficit coming in at 20.5 per cent of FY23 (BE), it was 21.2 per cent of BE in June 2022,” Sinha added.
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