India's fiscal deficit in FY23 likely to come around 6.5% against 6.4% budget estimate: SBI Ecowrap report
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The SBI Research Ecowrap in its latest report has stated that India's fiscal deficit in the current financial year (FY23) is likely to come around 6.5 per cent, as against the budget estimate of 6.4 per cent. Fiscal deficit for Q1FY23 has reached 21.2 per cent of the annual target compared to 18.2 per cent in Q1 FY22. Tax revenue has been robust with record high GST revenues which have been possible because of increased compliance and higher economic activity.
On the expenditure side, the government has incurred higher capital expenditure (23.4 per cent of BE in FY23 compared to 20.1 per cent of BE during the same period in FY22) which bodes well for growth potential. The report has also revised current account deficit (CAD) estimates from 3.2 per cent of GDP to 3.7 per cent of GDP in the current financial year.
The goods and services (GST) in this year has remained above Rs 1.4 lakh crore for the straight five months and the latest numbers of July 2022 showed 28 per cent rise to Rs 1.49 lakh crore from the corresponding month last year. It said ‘Importantly, its estimates of inflation-adjusted GST revenue for FY23 show the average collection has been around Rs 1.20 lakh crore. This is a 26 per cent jump in inflation-adjusted GST from the pre-pandemic level at Rs 95,000 crore’.
