Budget Speech 2023: Finance Minister Nirmala Sitharaman on Wednesday during the Budget Speech 2023 said the government expects to meet the budgeted gross fiscal deficit (GFD) target of 6.4 per cent of GDP in the current financial year FY23. The finance minister has fixed the fiscal deficit target for the next financial year 2023-24 (FY24) at 5.9 per cent of GDP.
The fiscal deficit is the difference between expenditure and revenue of the government, when the former is higher. It is one of the important metrics among markets and policy makers to follow. It shows the health of the government’s finances and its dependency on the borrowing.
“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. We have adhered to this path, and I reiterate my intention to bring the fiscal deficit below 4.5 per cent of GDP by 2025-26,” she said, adding that the fiscal deficit for FY24 is estimated to be 5.9 per cent of GDP.
She said that to finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 15.4 lakh crore.
According to the latest data, India’s fiscal deficit during April-December 2022 stood at Rs 9.93 lakh crore, or 59.8 per cent of the full-financial year target. The total expenditure during April-December 2022 stood at Rs 28.18 lakh crore, which is 71.4 per cent of the Budget Estimate 2022-23. The government’s total receipts stood at Rs 18.25 lakh crore, which is 79.9 per cent of the full fiscal year target.
For the current financial year, she said the revised estimate of the total receipts other than borrowings is Rs 24.3 lakh crore. Of this, the net tax receipts are Rs 20.9 lakh crore. The revised estimate of the total expenditure is Rs 41.9 lakh crore, of which the capital expenditure is about Rs 7.3 lakh crore.
For states, Sitharaman said states will be allowed a fiscal deficit of 3.5 per cent of GSDP of which 0.5 per cent will be tied to the power sector reforms.
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