India’s fiscal deficit at 55% full-year target at Dec-end 2023, says CGA

NEW DELHI — The Union government’s fiscal deficit touched INR 9.82 lakh crore or 55 per cent of the annual Budget target at December-end 2023, according to data released by the Controller General of Accounts (CGA) on Wednesday.

In the corresponding period last year, the deficit was 59.8 per cent of the budget estimate of 2022-23.

For 2023-24, the government’s fiscal deficit is estimated to be at INR 17.86 lakh crore or 5.9 per cent of the GDP.

The government’s total revenue stood at INR 20.71 lakh crore (76.3 per cent of corresponding BE 2023-24 of total receipts) as of December 2023.

This comprised INR 17.29 lakh crore tax revenue (net), INR 3.12 lakh crore of non-tax revenue and INR 29,650 crore of non-debt capital receipts.

Non-debt capital receipts consist of the recovery of loans and miscellaneous capital receipts.

The CAG’s monthly account data further said INR 7.47 lakh crore has been transferred to state governments as devolution of share of taxes by the central government up to December 2023, which is INR 1,37,851 crore higher than the previous year.

The total expenditure incurred by the Centre was INR 30.54 lakh crore (67.8 per cent of corresponding BE 2023-24), out of which INR 23.80 lakh crore is on revenue account and INR 6.73 lakh crore on capital account.

Out of the total revenue expenditure, INR 7,48,207 crore was on account of interest payments and INR 2,76,804 crore towards major subsidies.

Aditi Nayar, Chief Economist, Icra, said the government’s fiscal deficit was marginally lower than the INR 9.9 lakh crore recorded in April-December FY2023.

While net tax revenues rose by 11 per cent, non-tax revenues expanded by 46 per cent on the back of the RBI dividend, amid a marginal 2 per cent growth in revenue expenditure and a robust 38 per cent year-on-year expansion in capex.

“Icra does not expect the fiscal deficit target of INR 17.9 lakh crore for FY2024 to be breached. However, a lower nominal GDP than what the Union Budget had pencilled in could result in the fiscal deficit printing at 6 per cent of GDP,” Nayar said.

Continuing the path of fiscal consolidation, the government intends to bring the fiscal deficit below 4.5 per cent of GDP by 2025-26.

Finance Nirmala Sitharaman is expected to outline the details of the fiscal deficit for the current fiscal and 2024-25, along with the Centre’s market borrowing programme, in her interim Budget on Thursday.