Government Achieves FY23 Target Of 6.4% Fiscal Deficit

The fiscal deficit for FY23 is in line with the fiscal glide path envisioned by finance minister Nirmala Sitharaman in the union budget for FY24 that she presented on 1 February, according to a media which cited a ministry official who asked to remain anonymous.

In order to close the shortfall between revenue receipts and expenditures in a given fiscal year, the government must borrow money.

The fiscal responsibility and budget management (FRBM) Act's mandated statement of fiscal policy, which was due on 1 February stated that the fiscal deficit of the Union Government, estimated at 9.2 per cent of GDP during the pandemic year FY 2020-21, moderated to 6.7 per cent of GDP in FY 2021-22 and is budgeted to further decline to 6.4 per cent of GDP in FY 2022-23.

The fiscal deficit was to be significantly reduced by Sitharaman to 5.9 per cent of GDP in 2023–2024, with a projected tapering off to 4.5 per cent of GDP by FY26. 

"In my Budget Speech for 2021-22, I had announced that we plan to continue the path of fiscal consolidation, reaching a fiscal deficit below 4.5 per cent by 2025-26 with a fairly steady decline over the period," she said in her most recent Budget speech on 1 February.

The fiscal deficit figures, according to the chief economic adviser (CEA) V Anantha Nageswaran show that the fiscal consolidation is on track. He pointed out that we are on track to achieve (a fiscal deficit of) 5.9 per cent (of GDP) budgeted for the current financial year on the back of sustained economic growth.

The central government spent a total of 41,88,837 crore in FY23, with 34,52,518 crore on the revenue account and 7,36,319 crore on the capital account, according to information made public by the controller general of accounts (CGA) on Wednesday. 

According to a statement from the finance ministry, "Out of the total revenue expenditure, 9,28,424 crore is on account of interest payments and 5,30,959 crore is on account of major subsidies."