In a positive development, the Union government successfully achieved its revised budget estimate of a fiscal deficit of 6.4% of GDP, thanks to strong revenue receipts and effective expenditure management.
According to data released by the Controller General of Accounts (CGA), the fiscal deficit for the fiscal year 2022-23 amounted to Rs 17.3 lakh crore, slightly lower than the previous year’s figure of Rs 17.5 lakh crore. Total receipts for FY23 reached Rs 24.6 lakh crore, surpassing the government’s revised estimate of Rs 24.3 lakh crore, marking an 11.2% increase over FY22.
The fiscal deficit represents the gap between the government’s revenue and expenditure. The Indian economy’s recovery following the Covid-19 pandemic has led to significant revenue growth, with GST receipts showing particularly strong monthly gains.
The statement of fiscal policy, mandated by the Fiscal Responsibility and Budget Management (FRBM) Act on February 1, highlights the Union Government’s fiscal deficit progress. It states, “The fiscal deficit of the Union Government, estimated at 9.2% of GDP during the pandemic year FY 2020-21, moderated to 6.7% of GDP in FY 2021-22 and is budgeted to decline further to 6.4% of GDP in FY 2022-23.”
During the Budget 2023 announcement, Finance Minister Nirmala Sitharaman emphasized the government’s goal of further reducing the fiscal deficit to 5.9% of GDP in 2023-24 and ultimately achieving a 4.5% deficit by FY26. She stated, “In my Budget Speech for 2021-22, I had announced that we plan to continue the path of fiscal consolidation, reaching a fiscal deficit below 4.5 percent by 2025-26 with a fairly steady decline over the period.”
India’s Chief Economic Adviser (CEA), V Anantha Nageswaran, commented that the fiscal deficit numbers indicate that “fiscal consolidation is on track.” Highlighting the fiscal deficit target for FY23, the CEA stated that it aligns with the budget and indicates progress towards achieving the budgeted fiscal deficit of 5.9% of GDP for the current financial year.
Based on the CGA data findings:
According to the data provided by the CGA, the central government’s total expenditure for FY23 amounted to Rs. 41,88,837 crore. Out of this, Rs. 34,52,518 crore was spent on the revenue account, while Rs. 7,36,319 crore was allocated to the capital account. The finance ministry’s statement revealed that within the total revenue expenditure, Rs. 9,28,424 crore was designated for interest payments, and Rs. 5,30,959 crore was allocated for significant subsidies.
Regarding revenue generation, the central government collected a total of Rs. 24,55,706 crore in receipts during the fiscal year 2022-23. This comprised Rs. 20,97,368 crore in tax revenue (net to the center after sharing with states), Rs. 2,86,151 crore in non-tax revenue, and Rs. 72,187 crore in non-debt capital receipts. Non-debt capital receipts included the recovery of loans (₹26,152 crore) and miscellaneous capital receipts (₹46,035 crore).
