Union Budget 2023-24: According to the report, the Centre had pegged its FY23 fiscal deficit target at 6.4 per cent of the Gross Domestic Product (GDP).
Amid preparations of the Union Budget 2023-24, reports have surfaced that the Centre is likely to meet its target for the fiscal deficit. As per a report, the Centre may also do better than the budgeted FY23 fiscal deficit target as the revenue game is relatively better.
“We are confident that we will meet the fiscal deficit target. It could even be better in percentage terms,” said an official as per the Economic Times.
According to the report, the Centre had pegged its FY23 fiscal deficit target at 6.4 per cent of the Gross Domestic Product (GDP). However, in the light of the government expected to meet its target, several ministries may not be in a place to fully utilise their allocation of the year. Additionally, the reported higher-than-budgeted nominal GDP growth may also help deficit numbers.
The report adds that the central excise collections have been muted due to tax cuts in order to manage inflation. Even the windfall tax levied on domestic crude is not expected to yield much as the government is reportedly losing out on commensurate revenues on profit petroleum. However, the revenues have managed to remain steady as both direct taxes and Goods and Service Tax (GST) have posted string numbers.
Additionally, since many ministries are not expected to fully utilise their FY23 budgets, it somewhat provides room for the finance ministry to meet all the demands without diverting much from the fiscal deficit. The ET report also mentions that the total expenditure budget for FY23 is Rs 39.4 lakh crore and in the first half, the government spend only Rs 18.2 lakh crore. However, to contrast these numbers, are Centre’s collections that amount to 52.7 per cent of the budgeted receipts in the first half of the fiscal, as per the report.