The latest government data reveals that the fiscal deficit reached Rs 11 lakh crore at the end of January, accounting for 63.6% of the revised annual target. This information was released on Thursday in New Delhi. Comparatively, during the same period last year, the fiscal deficit stood at 67.8% of the Revised Estimates (RE) of the Union Budget 2022-23.
Fiscal Targets for 2023-24
For the fiscal year 2023-24, the government has set the fiscal deficit target at Rs 17.35 lakh crore or 5.8% of the GDP. Total receipts up to January 2024 amounted to Rs 22.52 lakh crore, equivalent to 81.7% of the corresponding Revised Estimates (RE) for 2023-24 of total receipts.
Breakdown of Receipts and Expenditure
The total receipts include Rs 18.8 lakh crore of tax revenue (net), Rs 3.38 lakh crore of non-tax revenue, and Rs 34,219 crore of non-debt capital receipts. On the expenditure side, the Centre incurred Rs 33.54 lakh crore, with Rs 26.33 lakh crore allocated to revenue account and Rs 7.2 lakh crore to capital account.
Devolution to State Governments
A notable observation from the Controller General of Accounts (CGA) data is the transfer of Rs 8,20,250 crore to state governments as the share of taxes by the central government up to January 2024, marking a significant increase from the previous year.
Economic Outlook and Projections
Commenting on the fiscal data, Aditi Nayar, Chief Economist at ICRA, expressed confidence in the government’s ability to manage fiscal targets. The interim Budget presented by Prime Minister Narendra Modi’s government refrained from announcing populist measures, aiming to reduce the fiscal deficit to 5.1% of GDP in the next fiscal year and further to 4.5% in FY26.
GDP Growth and Fiscal Management
The nominal GDP growth for the upcoming financial year is projected at 10.5%, with the nominal GDP estimated at Rs 3,27,71,808 crore. Despite challenges, the government has shown improvement in tax buoyancy, achieving a fiscal deficit of 5.8% against the budget estimate of 5.9% for the current financial year.
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