Menu

government deficit

economy

Centre Pose Positive Of Meeting Fiscal Deficit Target

, , , , , , , ,

As per the government’s expectations, gross tax revenues may exceed the Rs 27.6 lakh crore FY23 budget estimates by at least Rs 3-3.5 lakh crore. A nominal GDP growth projected the budget for FY23 at 11.1 per cent. The actual growth, however, may be much higher due to the high inflation

The Centre is expecting to perform better than the budgeted FY23 fiscal deficit target which is fixed at 6.4 per cent of GDP (gross domestic product). The reasons quoted behind this are buoyant revenues, according to a media report.

Various ministries may lack to utilise their full allocation for the year in order to provide a cushion to the finance ministry for meeting the sharply higher requirement for food, fertiliser and petroleum subsidies. The growth of nominal gross domestic product (GDP), which was recorded higher-than-budgeted, may also help deficit numbers.

As per the government’s expectations, gross tax revenues may exceed the Rs 27.6 lakh crore FY23 budget estimates by at least Rs 3-3.5 lakh crore.

Revenues have been buoyant with both direct taxes and the Goods and Service Tax (GST) recording a strong growth. In order to cool down inflation, the brunt of the tax cuts have softened, the central excise collections.

Also, the windfall tax imposed on domestic crude may not yield much. This can be due to the government losing commensurate revenues on profit petroleum, according to the media report.

Expectedly, the disinvestment too will be less than the Rs 65,000 crore estimated for FY23 and privatisation of public sector banks may not be taken up this financial year. The Single Nodal Account for the management of Central Sector Scheme (CSS) funds, has also reset the release of funds for welfare and development schemes. It was a significant expenditure reform.

On the basis of utilisation, the funds are released directly to the states, which has streamlined the process. Spending, however, has been slow as the new system settled down. States too have substantial unspent amounts.

This may result in many ministries not be able to use FY23 budgets fully, which will enable the finance ministry to meet demands elsewhere without derailing the fiscal deficit. The total expenditure budget accounts for FY23 is Rs 39.4 lakh crore. The government, during the first half, spent Rs 18.2 lakh crore which is 46.2 per cent of the full fiscal estimate. In contrast, the collection made by centre is 52.7 per cent of the budgeted receipts during the first half of the fiscal.

A nominal GDP growth projected the budget for FY23 at 11.1 per cent. The actual growth, however, may be much higher due to the high inflation. The nominal GDP growth reported during the first quarter of the fiscal year was 26.7 per cent.

nirmala sitharaman

FinMin To Monitor Revenue Daily From March 15

, , , , , ,

Keen to keep government deficit within stated targets, the finance ministry will from March 15 start daily monitoring of the revenue receipts, including tax collections, as well as expenditure

Keen to keep government deficit within stated targets, the finance ministry will from March 15 start daily monitoring of the revenue receipts, including tax collections, as well as expenditure.

The move comes against the backdrop of a possible deferment of the initial public offering (IPO) of LIC, which was expected to fetch over Rs 60,000 crore, to the next financial year in view of the ongoing Russia-Ukraine war and its implication on Indian markets.

On the other hand, the government’s decision to bring back thousands of Indian students stranded in Ukraine will impose an additional burden on the exchequer.

According to officials, the daily monitoring of tax and non-tax revenue collections will help the government in taking timely corrective actions, wherever needed.

“The CBDT and CBIC have been asked to report flash figures up to the previous day latest by 12 noon. Besides, other non-tax and disinvestment receipts would have to be reported on a daily basis,” the official told PTI.

Officials said that the Controller General of Accounts (CGA) has been asked to provide daily revenue collection and expenditure figures of various ministries between March 15 and March 31 to the expenditure secretary.

The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) are the apex bodies responsible for collecting direct and indirect taxes, respectively.

Likely deferment of LIC IPO along with additional burden on bringing back Indians stranded in Ukraine will put pressure on the fiscal deficit, which has already been raised in the Revised Estimates (RE) to 6.9 per cent of GDP, from 6.8 per cent estimated earlier.

The government has collected Rs 15.47 lakh crore in net tax revenue, which is 87.7 per cent of the full-fiscal target of Rs 17.65 lakh crore.

Similarly, non-tax revenue collections stood at Rs 2.91 lakh crore till January, or 92.9 per cent of the RE target of Rs 3.13 lakh crore.

However, the government has raised only Rs 12,423 crore from disinvestments so far this fiscal, against the revised target of Rs 78,000 crore. It has been banking on LIC IPO to meet the target.

The government’s total expenditure till January-end worked out to be Rs 28.09 lakh crore, as against the RE of Rs 37.70 lakh crore for the entire fiscal.

(PTI)