India's Fiscal Deficit Till August At 32.6% Of Full-Year Target
ICRA's Chief Economist sees several upside risks to the government over-shooting its deficit target this fiscal by Rs 1 lakh crore
The central government's fiscal deficit for the April-August 2022 period came close to 32.6% of its target for the full fiscal.
The fiscal deficit for the April-August period in actual terms stood at Rs 5.41 lakh crore, or 32.6% of the budget estimate of Rs 16.6 lakh crore, or 6.4% of GDP, for FY 2023, according to data from the Controller General of Accounts published on Friday.
Aditi Nayar, chief economist with ICRA Ltd. said there are several upside risks to the government overshooting its deficit target this fiscal by Rs 1 lakh crore, despite higher non-excise taxes, savings on account of lower wheat procurement, and the windfall tax and export duties on petroleum products.
These risks include the subsidies announced as inflation fighting measures in May and the latest extension of the 5kg/month food subsidy scheme, she said.
The government's total expenditure was at Rs 13.9 lakh crore, 35.2% of budget estimate compared with 36.7% at the same time last year.
Capital expenditure was at 33.7% v/s 31% a year ago.
Revenue expenditure at 35.6% v/s 37.7% in the corresponding period a year ago.
Revenue receipts stood at Rs 8.16 lakh crore or 37.1% of the budgeted figures, compared to 44.4% in the corresponding period an year ago.
Net tax revenue stood at 36.2% of the budget estimate against 41.7% an year ago.
Non-tax revenue stood 43.3% of the budget estimate compared to 61.2% in the last financial year.
On the capex figure, Nayar said though the latest figures are an improvement on a year-on-year basis, the government has a larger capex plan of Rs 7.5 Lakh crore for this fiscal.
Averages capital spending at around Rs 50,000 crore per month, is lower than the required monthly average of Rs 62,500 crore to meet the FY2023 BE. This, Nayar attributes to a slow pickup in the disbursals under the interest free Rs 1 lakh crore capex loan for state governments.
The incremental net revenue receipts in August 2022 halved from a year ago level owing to the double instalment of tax devolution to state governments during the month given the buoyancy in revenues on a year-to-date basis, Nayar said.
"Additionally, various taxes such as corporation tax, personal income tax, excise duty, customs duty, and CGST saw a year-on-year decline in collections in the month of August 2022," she said.