India's central government began FY23 with a fiscal deficit of Rs 74,846 crore in April – or 4.5 percent of the full-year target – according to data released on May 31 by the Controller General of Accounts.
The Centre is targeting a fiscal deficit of Rs 16.61 lakh crore for FY23, which the budget estimated will amount to 6.4 percent of the Gross Domestic Product (GDP).
The fiscal deficit had amounted to 5.2 percent of the full-year target in the first month of FY22.
In April, the Centre's total receipts were up 35.1 percent year-on-year at Rs 2 lakh crore, with gross tax revenue at Rs 2.32 lakh crore – 36.5 percent higher compared to April 2021.
However, the trends showed by receipts in April are unlikely to bear out for the full year, with actions taken by the Centre earlier this month having led to a shift in the trajectory of its finances.
On May 21, Finance Minister Nirmala Sitharaman announced a slew of measures to reduce price pressure for consumers, the most eye-catching of them being a reduction in the excise duty on petrol and diesel by Rs 8 per litre and Rs 6 per litre, respectively. This move is expected to lead to a revenue loss of around Rs 1 lakh crore for the entire financial year, or around Rs 83,000 crore for 10 months.
According to economists, the fiscal deficit for FY23 may exceed the target of 6.4 percent by as much as 50 basis points.
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