In her Budget 2023-24, Finance Minister Nirmala Sitharaman has brought down the fiscal deficit target. The fiscal deficit in Budget 2023-24 is projected to be 5.9 per cent of GDP against the 6.4 per cent in the revised estimates for 2022-23. In absolute terms, the fiscal deficit in Budget 2023-24 is expected to be at Rs 17.87 lakh crore as against Rs 17.55 lakh crore in RE 2022-23.
Below are the major numbers behind Sitharaman’s fiscal strategy as projected by her in the Budget 2023-24:
Revenue Receipts (Tax and Non-tax)
Gross Tax Revenue is projected to grow at 10.4 per cent in Budget estimates (BE) 2023-24 over Revised estimates (RE) 2022-23. Both, the Direct and Indirect Tax receipts are individually estimated to grow at 10.5 per cent and 10.4 per cent, respectively. In BE 2023-24, it is estimated that the Direct and Indirect taxes to contribute 54.4 per cent and 45.6 per cent, respectively, to the Gross Tax Revenue.
Tax Revenue (Net to Centre)
In BE 2023-24, the Tax Revenue (Net to Centre) is projected at Rs 23.31 lakh crore, which is around 11.7 per cent more than Rs 20.87 lakh crore of RE 2022-23.
Tax to GDP ratio
In BE 2023-24, the Tax to GDP ratio is estimated at 11.1 per cent which is at par with the RE of 2022-23.
Non-Tax Revenue
In BE 2023-24, the NTR is estimated to contribute 11.5 per cent of the Revenue Receipt and is projected to be at Rs 3.02 lakh crore which is 15.2 per cent more than the RE 2022-23 of Rs 2.62 lakh crore.
Revenue Receipts
The Revenue Receipts of the Central Government are estimated at Rs 23.48 lakh crore and Rs 26.32 lakh crore in RE 2022-23 and BE 2023-24, respectively
Non-Debt Capital Receipts
The Non-Debt Capital Receipts are estimated at Rs 84,000 crore in BE 2023-24 compared Rs 83,500 crore of RE 2022-23.
Total Expenditure
Total expenditure of the Centre in BE 2023-24 is estimated at about Rs 45.03 lakh crore, an increase of 7.5 per cent over RE 2022-23. A major contributor to the growth of the total expenditure in BE 2023-24 is the capital expenditure.
Capital Expenditure
The Budget for FY 2023-24 provisions for above Rs 10 lakh crore (3.3 per cent of GDP) for capital expenditure. This depicts a sharp increase of 37.4 per cent in capital budget in BE 2023-24 over Rs 7.28 lakh crore of RE 2022-23.
Financial Assistance to States
The scheme for providing financial assistance to the States for capital
expenditure introduced in FY 2022-23 has been extended in FY 2023-24, with the enhanced outlay of Rs 1.30 lakh crore. This represents an increase of 30
11 per cent over BE 2022-23 allocation and accounts to nearly 0.4 per cent of GDP of FY 2023-24.
Revenue Expenditure
Expenditure on revenue account has been estimated at about Rs 35.02 lakh crore (11.6 per cent of GDP) in BE 2023-24 recording a growth of 1.2 per cent over Rs 34.59 lakh crore of RE 2022-23.
Interest Payments
In BE 2023-24, interest payments are estimated, based on the prevailing interest rate for different securities, at Rs 10.80 lakh crore which is 30.8 per centof the total revenue expenditure and 41.0 per cent of the Revenue Receipts of the Centre.
Major Subsidies
Another significant portion of the Revenue Expenditure is the major subsidies which includes food, fertiliser, and petroleum subsidies. Major subsidies at Rs 3.75 lakh crore (1.2 per cent of GDP) are 10.7 per cent of Revenue Expenditure in BE 2023- 24. The subsidy bill was revised upward in RE 2022- 23 to rS 5.22 lakh crore as compared to Rs 3.18 lakh crore in BE 2022-23 mainly on account of the extension of the free food grain programme and greater spending on fertiliser subsidies.
Tax devolution to the States
Tax devolution to the States, as per recommendations of the 15th Finance Commission, works out to be Rs 10.21 lakh crore in BE 2023-24.The devolution of the states’ share of taxes which was estimated at about Rs 8.17 lakh crore in BE 2022-23 has been substantially enhanced in RE 2022-23 to about Rs 9.48 lakh crore on account of increased tax receipts.
Borrowings
The Central Government has planned gross and net borrowings through dated securities (G-Sec and T-Bills) of about Rs 15.43 lakh crore and Rs 12.31 lakh crore, respectively, in BE 2023-24 which is 8.6 per cent and 1.9 per cent higher than gross borrowings of Rs 14.21 lakh crore and net borrowing of Rs 12.08 lakh crore in RE 2022-23. However, in terms of per cent of GDP, the Gross and Net Borrowing are expected to go down to 5.1 per cent and 4.1 per cent, respectively, in BE 2023-24 as compared to 5.2 per cent and 4.4 per cent, respectively, in RE 2022-23.
Borrowing from NSSF
For financing the Fiscal Deficit in BE 2023-24, borrowing from National Small Savings Fund is estimated at about Rs 4.71 lakh crore; whereas, those from external sources and State Provident Funds are estimated at Rs 22,118 crore and Rs 20,000 crore, respectively. Of the total financing of Fiscal Deficit, the share of net market borrowings and NSSF is 68.9 per cent and 26.4 per cent, respectively, in BE 2023-24.
Public debt
Total public debt, including external debt at the book value of the Centre is estimated at Rs 152.54 lakh crore in BE 2023-24 against Rs 135.91 lakh crore in RE 2022-23. As a percentage of GDP, the total public debt is estimated to increase from 49.8 per cent of GDP in RE 2022-23 to 50.6 per cent of GDP in BE 2023-24.
Debt to GDP Ratio
If the external debt is valued at the current exchange rate, the public debt to GDP ratio is estimated at 51.3 per cent in BE 2023-24. A comprehensive estimate of the Central Government debt with a widened definition is 57.2 per cent of GDP in BE 2023-24.
Balance between Revenue receipts and Revenue expenditure
Total revenue receipts and revenue expenditure of the Centre are estimated at Rs 26.32 lakh crore and Rs 35.02 lakh crore, respectively, in BE 2023-24. Based on this, the ratio of revenue receipts to revenue expenditure is estimated at 75.2 per cent in BE 2023- 24 improving from 67.9 per cent and 67.8 per cent in RE 2022-23 and FY 2021-22, respectively. The improvement of the ratio is mainly on account rationalisation of revenue expenditure and stable tax to GDP ratio. After adjusting the of Grants-in-aid for creation of capital assets, the ratio of revenue receipts to revenue expenditure is estimated at 83.9 per cent in BE 2023-24.
Capex-FD ratio
The ratio of capital expenditure to Fiscal Deficit (Capex-FD) broadly measures the extent of borrowed resources used for financing the capital expenditure of the government. The ratio is estimated at 56.0 per cent in BE 2023-24 as compared to 41.5 per cent in RE 2022-23 and 37.4 per cent in FY 2021-22. Over the period of time, this ratio has been improving due to measures taken by the government to boost the capital expenditure.
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