The Union government's fiscal deficit for the first 11 months of 2022-23 increased to Rs 14.54 lakh crore, according to data published on Friday by the Controller General of Accounts.
The fiscal deficit for April 2022-February 2023 was Rs 14.54 lakh crore, accounting for 82.8 per cent of the full-year goal for 2022-23.
The fiscal deficit in the first 11 months of the previous fiscal year was 82.7 per cent of the goal for that year.
In the 2023 Budget, the Centre increased its fiscal deficit goal for 2022-23 to Rs 17.55 lakh crore from Rs 16.61 lakh crore. However, with the size of the Indian economy expected to surpass the Budget estimate this year, the fiscal deficit as a percentage of GDP is expected to remain unchanged from the original goal of 6.4 per cent.
While the Centre is on track to achieve its fiscal deficit target of 6.4 per cent of GDP in 2022-23, financial developments in February were not all positive.
On the receipts side, total tax revenues increased by 12 per cent between April and February, though the increase in February was only 4.5 per cent.
“To meet the FY23 Revised Estimate, gross tax revenues must grow by 14 per cent year on year in March, including a 32 per cent increase in corporation tax, which appears somewhat optimistic,” said Aditi Nayar, ICRA's chief economist.
Total revenues increased by 11.6 per cent between April and February and total spending increased by 11.1 per cent in the same period but fell by 2.6 per cent in February.
Worryingly, the decrease in the Centre's spending in February was due to a decrease in capital expenditure, which was Rs 20,335 crore last month compared to Rs 43,495 crore in February 2022.
The Centre's capital spending in February was Rs 20,335 crore, the lowest since July 2021, when it spent Rs 16,932 crore.
To achieve its full-year capex target of Rs 7.28 lakh crore, the government should have spent Rs 1.38 lakh crore this month.
Overall, the fiscal imbalance in February was Rs 2.63 lakh crore, which was 30.5 per cent less than in February 2022.