NEW DELHI: India’s fiscal deficit expanded to Rs 7.58 lakh crore in the April-October period, 39% higher than that of the same period last year, as non-tax revenues contracted by 14%, revenue expenditures rose 10% and capex surged 62%.
The fiscal deficit has breached 45% of the full-year budget estimate during the period October, the government data showed. In the same period of the last year, the fiscal deficit, which is the difference between expenditure and revenue, stood at 36% of the budget estimates of 2021-22. The fiscal deficit of the government is expected to be at 6.4% of the GDP.
Net tax receipts surged to Rs 11.71 lakh crore, registering an 11% growth over the same period last year . Total receipts that include tax, non-tax revenues and capital receipts increased 8% to Rs 13.6 lakh crore.
The total expenditure was at Rs 21.44 lakh crore- – with revenue expenditure at Rs 17.4 lakh crore and capital expenditure at Rs 4.1 lakh crore. Capital expenditure, which is money spent in creating infrastructure, rose 61% year-on-year in the first seven months of the current financial year.
“While monthly capex stepped down from Rs 90,561 crore in September 2022 to Rs 66,125 crore in October 2022, the latter marked a sharp year-on-year jump, which was partly driven by a welcome rise in the capital transfers to states, reflecting the release of funds under the interest free capex loan scheme,” says Aditi Nayar, chief economist, ICRA Ltd.
According to the EY, the government’s fiscal data showed a healthy growth in the government’s gross tax revenues (GTR) at 18% during the first seven months of FY23, well above the budgeted full year growth of 10.7% over FY22 RE (revised estimates) and of only 1.8% over the actual numbers. The growth in
GTR during April to October FY23 is largely driven by growth in direct taxes at nearly 26%.
“We expect the FY23 GTR growth to be close to 18% given the high nominal GDP growth of 21.2% in 1HFY23,” DK Srivastava, Chief Economic Advisor, EY India said. Assuming a growth of 18% in GTR in FY23, its magnitude would exceed the budgeted level by a margin of nearly R4.4 lakh crore, he said.
