India’s fiscal deficit for the financial year 2021-22 stood at Rs 15,86,537 crore (provisional) or 6.71 per cent of gross domestic product (GDP), which is lower than the 6.9 per cent deficit projected in the Revised Budget Estimates. According to official figures released on Tuesday.
The revenue deficit stood at 4.37 per cent at the end of 2021-22. For the last financial year, the government had initially kept the fiscal deficit at 6.8 per cent of GDP in the budget presented in February 2021, according to data released by the Controller General of Accounts on Tuesday.
According to the data, the fiscal deficit in April stood at Rs 16.61 lakh crore, which is 4.5 per cent of the target for FY23. The government has projected a higher fiscal deficit of 6.9 per cent of GDP in the revised estimates in the Budget for 2022-23 or Rs 15,91,089 crore for the fiscal year ended March.
According to the data, revenue receipts stood at Rs 21.68 lakh crore or 104.3 per cent of the revised estimate for FY22, while net tax revenue stood at 18.2 lakh crore. The total expenditure of the government in April-March 2022 stood at Rs 37.94 lakh crore, just above the revised budget estimate.
Revenue from disinvestment and various asset sales stood at over Rs 14,000 crore in FY 2021-22, against the budget target of Rs 78,000 crore.
In March alone, total receipts rose 36.6 per cent year-on-year to Rs 3.80 lakh crore as net tax revenue on account of quarterly advance tax payments grew 61.5 per cent to Rs 3.39 lakh crore.
On the expenditure side, total expenditure declined 5.9 per cent year-on-year to Rs 6.50 lakh crore in March. However, the capital expenditure in the last month of FY22 was five times higher at Rs 1.08 lakh crore as compared to the same period last year.
Aditi Nair, Chief Economist, ICRA, said, “Provisional data indicates that the government’s fiscal deficit India Benefiting from higher tax (Rs 0.55 lakh crore) and non-tax (Rs 0.34 lakh crore) revenue receipts and lower capital expenditure (Rs 0.1 lakh crore), was marginally lower than the Revised Estimates for FY22, which contributed to the deficit. Absorbed non-debt capital receipts (Rs.-0.61 lakh crore) and higher revenue expenditure (Rs. +0.34 lakh crore).
Sunil Kumar Sinha, principal economist at India Ratings and Research, said revenue expenditure was 1.1 per cent higher, while capital expenditure was 1.6 per cent lower as compared to FY22 (RE). Clearly inflation-driven nominal GDP growth has led to higher tax collections and has resulted in marginally better financial performance as compared to FY22 (RE).
“Higher inflation though is going to put a strain on domestic consumption, it will lead to higher tax collection for the government (inflation tax) due to higher nominal GDP. However, difficulties arising from the Ukraine-Russia conflict will cast a shadow on fiscal year 2013 budgetary spending by putting pressure on the government’s subsidies and other income support measures.
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