Centre contains fiscal deficit at 6.7% of GDP

NEW DELHI: Buoyant tax collections and higher growth in nominal GDP (including inflation) helped the Centre contain its fiscal deficit at 6. 7% of GDP, against the 6. 9% target for 2021-22.
Latest data released by the Controller General of Accounts (CGA) showed that fiscal deficit was contained at under 99. 7% of the revised estimate (RE) despite the overall spending being higher than the budgeted level.
“FY22 (prov) fiscal deficit as per CGA came in at Rs 15. 86 lakh crore, marginally lower than the FY22 (RE) of Rs 15. 91 lakh crore. FY22 nominal GDP as per provisional estimate was 1. 9% higher than the first advance estimate, used in preparation of FY23 Budget. This has resulted in FY22 provisional fiscal deficit to GDP declining to 6. 7% as against 6. 9% in FY22 (RE),” said Sunil Kumar Sinha, principal economist at India Ratings and Research.
Overall expenditure was estimated at Rs 37. 9 lakh crore or 100. 6% of the RE, with capital expenditure of Rs 5. 9 lakh crore falling marginally short of the over Rs 6 lakh crore that was budgeted for. But, the government appeared more than happy at the level of capex, which was a key element of finance minister Nirmala Sitharaman’s strategy to revive the economy by creating demand for inputs, such as cement and steel, in addition to generating employment.
On the receipts front, the government fell short of the disinvestment target as the Ukraine war forced it to defer the LIC initial public offer. But it was more than made up by tax revenue, estimated at Rs 18. 2 lakh crore — 103% of the revised estimates for the fiscal year.