India meets FY2023 fiscal deficit target of 6.4%

INDIA’S fiscal deficit for the financial year ended March 31 touched 17.3 trillion rupees (S$283.3 billion), nearly 99 per cent of the revised annual estimate, government data showed on Wednesday (May 31).

The federal government met targetted fiscal deficit of 6.4 per cent of the gross domestic product (GDP), helped by higher tax revenue even as spending increased, as per a statement. The government will release the revised GDP estimate later in the day.

Net tax receipts through April-March were 20.97 trillion rupees or 100.5 per cent of the annual revised estimate, 15.2 per cent higher than the previous financial year, per the data.

Total expenditure during the period was 41.89 trillion rupees or 100 per cent of the annual goal and 10.4 per cent higher than the government’s spending last year.

The government’s capital spending on infrastructure projects increased 24.2 per cent from last year to 7.36 trillion rupees, aiding the economy.

Meanwhile, data for April 2023 – the first month of the new financial year – showed the fiscal deficit at 7.5 per cent of the full-year estimate.

Expenditure in the first month of the financial year was 10.6 per cent higher than a year ago, while net tax collections were 14 per cent lower than last year.

India has targeted a budget deficit of 5.9 per cent for the fiscal year that started Apr 1.

“Higher than budgeted dividend surplus transfer of 874.2 billion rupees from the Reserve Bank of India is likely to provide some cushion to meet any undershooting in other revenues streams or overshooting in expenses, relative to respective budget estimates,” said Aditi Nayar, an economist at ICRA. REUTERS