According to the Controller General of Accounts, the government’s budget deficit for the first 11 months of fiscal year 2022–23 increased to Rs 14.54 lakh crore.
The budget deficit for April 2022–February 2023 was Rs 14.54 lakh crore, accounting for 82.8 percent of the full-year projection for 2022–23. The fiscal deficit in the first 11 months of the previous fiscal year was 82.7 percent of the objective for that year.
In the 2023 budget, the union increased its fiscal deficit projection for 2022–2023 to Rs 17.55 lakh crore from Rs 16.61 lakh crore. Nevertheless, with the size of the Indian economy expected to surpass the budget forecast this year, the fiscal deficit as a percentage of GDP is expected to remain steady at the original goal of 6.4 percent.
Although the Union is on course to fulfil its budget deficit goal of 6.4 percent of GDP in 2022–2023, financial events in February were not all positive.
On the collections side, overall tax revenues increased by 12 percent between April and February, although the increase in February was just 4.5 percent.
“Gross tax revenues need to grow by 14 percent on a year-on-year basis in March to meet the FY23 Revised Estimate, including a 32 percent expansion in corporation tax, which seems somewhat optimistic,” pointed out Aditi Nayar, ICRA’s chief economist.
Overall revenues increased by 11.6 percent between April and February.
Total spending increased by 11.1 percent between April and February but fell by 2.6 percent in February.
Worryingly, the decrease in the Centre’s spending in February was due to a decrease in capital investment, which was Rs 20,335 crore last month compared to Rs 43,495 crore in February 2022.
The Centre’s capital spending in February was Rs 20,335 crore, the lowest since July 2021, when it spent Rs 16,932 crore.
To reach its full-year capex goal of Rs 7.28 lakh crore, the government should have spent Rs 1.38 lakh crore this month.
Overall, the budget deficit in February was Rs. 2.63 lakh crore, which was 30.5 percent less than in February 2022.