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Achieves 15% of its FY23BE in Apr-May’22 v/s 14% in Apr-May’21

* Total receipts for the Centre contracted by 12.1% YoY in May’22, after a sharp growth of 35.1% YoY in Apr’22, due to a 63% YoY decline in non-tax receipts during the month. This was largely on account of the less than half of the dividend received by the Centre in May’21.

* Total receipts for the Centre stood at INR3.8t in Apr-May’22, a growth of only 7.6% YoY. With this, the Centre has achieved ~17% of its FY23BE target, lower than the 18% achieved in Apr-May’21. However, the same is still very high when compared to its historical standard of 5-9% achieved during this period. Both direct/indirect taxes performed well during this period, thereby achieving 14%/16% of FY23BE.

* Total government expenditure grew at an eight-month high of 23.7% YoY in May’22 as against 21.2% YoY in Apr’22, led by a 20.1%/77.8% YoY growth in the government’s revenue/capital spending. Consequently, government spending in Apr-May’22 grew at a 14-month high of 22.6% YoY, thereby achieving ~15% of FY23BE, higher than ~14% achieved in FY22, but lower compared to the preceding five-year period.

* The government has achieved 14.3% of its budgeted (FY23BE) capex target, the highest in four years.

* Consequently, the government’s fiscal deficit from Apr-May’22 stood at INR2.04t. This accounts for 12.3% of its FY23BE as compared to 8.2% of its FY22BE achieved during the corresponding months. ? Although we are just two months into this fiscal, the government may overshoot its total receipts by just a notch and meet its expenditure target in FY23 (provided no additional expenditure is announced throughout the year). If so, we could see a fiscal deficit of 6.2% of GDP in FY23, instead of the government budgeted (FY23BE) 6.4% of GDP.

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