IGI Logo

Below Quote on Central Government Finances for FY23 - Rajani Sinha, Chief Economist, CareEdge

The Centre has stayed on the path of fiscal consolidation meeting the fiscal deficit target at 6.4% of GDP in FY23. Upbeat gross tax collections and thrust on capex have been the major highlights of the Centre’s fiscal performance during the year. Post-pandemic rebound and healthy economic activities supported the buoyancy in gross tax collections. Despite the high subsidy outgo, the quality of expenditure has improved as seen in the lower revenue expenditure to capital expenditure ratio at 4.7 in FY23 compared with 5.4 in the previous fiscal.

In FY24, we expect the growth in gross tax revenue to witness some moderation on account of lower nominal GDP growth. On the non-tax revenue front, the RBI’s transfer of Rs 87,416 crore is positive compared with the transfer of Rs 30,307 crore in the last fiscal. Dividend pay-out from the RBI alone has exceeded the budgeted amount of Rs 48,000 crore from RBI, nationalised banks, and financial institutions collectively. This is expected to support the government finances in the current fiscal amid slow disinvestment receipts.

Above views are of the author and not of the website kindly read disclaimer