India’s FY23 fiscal deficit at $209.46 million, meets 6.4% target

According to government data released on Wednesday, India’s fiscal deficit for the financial year that ended on March 31 reached 17.3 trillion rupees ($209.46 billion), which is nearly 99% of the revised annual estimate.

According to a statement, the federal government has achieved the targeted fiscal deficit of 6.4% of the gross domestic product (GDP), supported by increased tax revenue despite higher spending. The government plans to release the revised GDP estimate later in the day.

According to the data, net tax receipts during the period of April to March amounted to 20.97 trillion rupees, which is equivalent to 100.5% of the annual revised estimate. This represents a 15.2% increase compared to the previous financial year.

During the period, the total expenditure reached 41.89 trillion rupees, which corresponds to 100% of the annual target and reflects a 10.4% increase compared to the government’s expenditure in the previous year.

The government’s capital spending on infrastructure projects witnessed a notable increase of 24.2% compared to the previous year, reaching 7.36 trillion rupees. This surge in investment has played a significant role in supporting the economy.

In the initial month of the new financial year, April 2023, data revealed that the fiscal deficit stood at 7.5% of the estimated amount for the full year.

During the first month of the financial year, expenditure witnessed a growth of 10.6% compared to the same period last year. However, net tax collections experienced a decline of 14% in comparison to the previous year.

India has set a target of achieving a budget deficit of 5.9% for the fiscal year that commenced on April 1.

Aditi Nayar, an economist at ICRA, stated that the transfer of a dividend surplus of 874.2 billion rupees from the Reserve Bank of India, which is higher than the budgeted amount, is expected to offer some relief in case there is any shortfall in other revenue sources or an excess in expenses compared to the respective budget estimates.