Data released by the Controller General of Accounts (CGA) on Wednesday showed the deficit in absolute terms was at Rs 17.3 lakh crore compared with 17.5 lakh crore in the previous year. Total receipts rose to Rs 24.6 lakh crore in FY23 compared with government’s revised estimates Rs 24.3 lakh crore, an increase of 11.2% over FY22. Fiscal deficit is a difference between revenue and expenditure of the government.
The recovery in the economy after the Covid-19 pandemic has led to a sharp increase in revenues, with receipts from GST posting robust gains every month.
“The Centre’s fiscal position in FY23 came in line with the government’s revised projections for FY23. Better than expected growth in nominal GDP (16.1% as per provisional estimate for FY23 versus 15.4% as per 1st advance estimate for FY23), pick up in revenue collections, helped the government achieve this target. Higher than previously estimated growth in both tax and non-tax revenues helped the government boost its net tax revenues,” said Madan Sabnavis, chief economist at Bank of Baroda.
“This boost also helped major slippage in disinvestment receipts. Minor slippage in overall spending was covered by revenue growth and GDP boost. Slippage in spending could be attributed to higher outgo for fertiliser subsidies, which was offset by cut in spending by ministries like consumer affairs (food subsidy), agriculture, and health. We continue to expect a fiscal deficit ratio of 5.9% for FY24, as downside risks to revenue growth persist (easing inflation and slowing economic conditions),” said Sabnavis.
The target for the current fiscal could come under pressure due to a large number of challenges on the economic front but the government has signalled its resolve to stick to fiscal consolidation.
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