NEW DELHI: The Centre’s fiscal deficit in the first 10 months of the current financial year has widened by 27% to Rs 11.90 lakh crore compared to Rs 9.4 lakh crore in the same period last year. The fiscal deficit in the April-January period has reached 68% of the revised full year target of Rs 17.55 lakh crore, data from the Comptroller General of Accounts (CGA) showed. On a month-on-month basis the fiscal deficit increased 20% to over Rs 9.93 lakh crore in December.
The widening of the fiscal deficit could be attributed to moderate growth in net tax revenues (9% year-on-year) amid sharp contraction (21%) in non-tax revenues, and a 29% month-on-month growth in capex during the month. Revenue expenditure, or expenses on salaries and pensions, grew at 9.7% y-o-y during first 10 months of the financial year.
The government’s gross tax collection during April-January 2022-23 showed a 12.6% growth at Rs 23.62 lakh crore largely driven by a strong growth in GST (24.5%) and income tax (18.9%) collections. Corporate tax collections grew at 14.84%. However, excise duty collections fell by 19.26% during the April-January period.
“While there may be modest deviations from the revised estimates for direct taxes, disinvestment receipts and certain categories expenditures, ICRA does not expect the fiscal deficit to materially exceed the revised target of Rs. 17.6 lakh crore for FY2023,” says Aditi Nayar, chief economist at ICRA.
For the current financial year, the government targets to keep its fiscal deficit at 6.4% of the GDP. For the next financial year, the government has budgeted a fiscal deficit target of 5.9%.