The central government's fiscal deficit touched 82.8 per cent of the full-year target at the end of February, according to data released by the Controller General of Accounts (CGA) on Friday. In actual terms, the fiscal deficit or gap between the expenditure and revenue collection during April-February period stood at Rs 14.53 lakh crore.
The fiscal deficit in the comparable period of 2021-22 was 82.7 per cent of that year's Revised Estimate (RE) in the Budget. For the full year 2022-23, the government expects the deficit at Rs 17.55 lakh crore or 6.4 per cent of the GDP. CGA data showed that the net tax collection in the first 11 months of this fiscal was at Rs 17,32,193 crore or 83 per cent of the RE for 2022-23. In the comparable period last fiscal, the collection stood at 83.9 per cent of the RE for 2021-22.
Total expenditure incurred by the government was Rs 34.93 lakh crore (83.4 per cent of RE 2022-23), out of which Rs 29,03,363 crore was on Revenue Account and Rs 5,90,227 crore was on Capital Account. Out of the total revenue expenditure, Rs 7,98,957 crore was for interest payments and Rs 4,59,547 crore was on account of major subsidies. Aditi Nayar, Chief Economist at rating agency Icra, said the smaller incremental fiscal deficit in February relative to February 2022 benefitted from the step down in tax devolution between these two months as well as subdued capex.
While there may be some deviations from the revised estimates for corporate tax, disinvestment receipts and certain categories of expenditures following the supplementary demand for grants, Icra does not expect the fiscal deficit to sharply exceed the revised target of Rs 17.6 lakh crore for 2022-23. In the Union Budget presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1, the fiscal deficit target for 2023-24 was pegged at 5.9 per cent the GDP.
For the current year ending March 2023, the deficit has been retained at 6.4 per cent of the GDP. The government borrows from the market to finance its fiscal deficit. The government intends to bring the fiscal deficit below 4.5 per cent of the GDP by 2025-26.