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The central government's fiscal deficit between April and May touched ₹2,03,921 crore, or 12.3% of the year-to-March budgeted target, mainly due to higher expenditure, government data showed on Thursday.
Fiscal deficit is the difference between total expenditure and revenue of the government. It is an indication of the total borrowings that are needed by the government.
The fiscal deficit was at 8.2 per% of the Budget Estimate (RE) of FY22 during the corresponding period.
As per the data, the total receipts of the government at the end of May was at ₹3.81 lakh crore or 16.7 per cent of the BE for 2022-23. The collection was about 18 per cent of the BE of 2021-22 in the corresponding period last fiscal.
In May, the tax (net) revenue was at 15.9 per cent of the BE of 2022-23. It was 15.1 per cent of the BE 2021-22 in the year-ago period. In actual terms, the net tax revenue stood at ₹3,07,589 crore during April-May 2022-23.
As per the data, the central government's total expenditure at the end of May stood at ₹5.85 lakh crore or 14.8 per cent of this year's BE. It was 13.7 per cent of the BE in the corresponding period.
For 2022-23, the fiscal deficit of the government is estimated to be ₹16,61,196 crore.
In February this year, Prime Minister Narendra Modi's government set a fiscal deficit target of 6.4% of gross domestic output (GDP) for the year that started on 1 April, compared with a deficit of 6.7% last year.
A German brokerage recently said that the government can meet the fiscal deficit target of 6.4% for 2022-23 if there are no excise duty cuts to lower high oil prices and additional spending on subsidies.
Meeting the budgeted target will be possible if there is no further cut on excise duties, Deutsche Bank's chief economist Kaushik Das had said.
The note said that the recent cuts in excise duties, coupled with the higher spending on fertiliser, food and fuel subsidies have led to "upside risks" on the fiscal deficit target.
"...our analysis of the fiscal arithmetic at this juncture suggests that the central government can still potentially hold the FY23 fiscal deficit close to the target of 6.4 per cent of GDP, assuming no further excise duty cuts or/and additional spending on subsidies over and above what has already been announced," it added.
Sources told Reuters earlier that while increased spending to provide relief from inflation meant the government would miss this year's target, policymakers would seek to limit the deviation to 30 basis points.
"We will try to contain the slippage to last year's levels," an official said.
With agency inputs