Fiscal deficit touches 82.8% of full-year target, shows govt data

The central government’s fiscal deficit touched 82.8 per cent of the full-year target of Rs 17.55 trillion at the end of February, according to data released on Friday by the Controller General of Accounts (CGA).

In comparison, the fiscal deficit was 82.7 per cent of the target during the corresponding period in financial year 2021-22 (FY22). The fiscal deficit is the difference between government’s expenditure and income.

On the capital expenditure front, the Centre spent 81.1 per cent of the Rs 7.3 trillion target for FY23, compared with 80.6 per cent during the corresponding period a year ago. It was nearly 21 per cent higher than a year ago. Revenue expenditure in the April-February period stood at 83.9 per cent of FY23 Revised Estimate (RE) of Rs 34.59 trillion.

Aditi Nayar, chief economist at ICRA, said: “Growth in the gross tax revenues slowed to 4.5 per cent in February 2023, dampened by corporation tax and excise duty. Gross tax revenues need to grow by 14 per cent on a YoY (year-on-year) basis in March 2023 to meet the FY23 RE, including a 32 per cent expansion in corporation tax, which seems somewhat optimistic,” she added.

Total expenditure of Rs 34.93 trillion for April-February FY23 was 83.4 per cent of the RE.

Net tax revenue for the April-February FY23 period came in at Rs 17.32 trillion, about 17 per cent higher than the corresponding period last year.

Nayar said the balance capital spending needed to meet the FY23 RE was an optimistic 28 per cent higher than the actual capex incurred in March 2022, whereas the balance revenue spending was a mild 2.5 per cent higher than the year-ago level.

Earlier this month, the government sought parliamentary approval for additional spending of Rs 2.7 trillion through a second and final tranche of supplementary demands for grants.