It also said that the centre’s fiscal budget remains on the edge given the uncertainties arising from both the revenue and expenditure fronts
The Kotak Mahindra Bank on Friday in a report said that the centre’s fiscal deficit in the financial year 2023 (FYTD23) has been controlled, with a slight surplus in July. However, much of it has been achieved with expenditure being kept in check.
It also said that the centre’s fiscal budget remains on the edge given the uncertainties arising from both the revenue and expenditure fronts.
“In the absence of any expenditure rationalisation, the centre’s fiscals are likely to remain under pressure,” it added.
The report said that income tax and GST collections have been a key support for the revenue side. We continue to see the fiscal remaining under pressure with FY2023E gross fiscal deficit (GFD) and gross domestic product (GDP) staying within 6.4 to 6.8 per cent.
“For now, we pencil in GFD/GDP at 6.6 per cent assuming no cuts in expenditure and no changes to duties on petroleum products,” it said
Also, the Ministry of Finance on Thursday said that it has collected a gross goods and services tax (GST) revenue of Rs 1,43,612 crore in August 2022 which is 28 per cent higher than the same month in 2021.
The ministry said that out of the total collection, central GST is Rs 24,710 crore, state GST is Rs 30,951 crore, integrated GST is Rs 77,782 crore and cess is Rs 10,168 crore.
The government has settled Rs 29,524 crore to CGST and Rs 25,119 crore to SGST from IGST.
The total revenue of the centre and the states in August 2022 after the regular settlement is Rs 54,234 crore for CGST and Rs 56,070 crore for the SGST.
Much of the control on the fiscal deficit was owing to expenditure checks, which were at 28.6 per cent of FY2023BE (growth of 12 per cent) with revenue expenditure growth of 5 per cent and capital expenditure growth of 62 per cent, the report said.
“In July, the centre registered a marginal fiscal surplus of Rs110 bn with an expenditure contraction of 2 per cent. GFD in 4MFY23 fell marginally to 20.5 per cent of FY2023BE (from 21.2 per cent in 1QFY23),” it added.