Fiscal deficit improved to 6.7% in FY22

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Fiscal deficit improved to 6.7% in FY22

Fiscal deficit improved to 6.71% of the FY22 GDP over the revised budget estimate of 6.9% per cent mainly on account of higher tax realization.

National Statistical Office

  • The fiscal deficit in absolute terms was ₹15,86,537 crore (provisional).
  • The Finance Ministry in February had estimated the deficit at ₹15,91,089 crore or 6.9% of GDP.
  • Tax receipts during the fiscal were at ₹18.2 lakh crore as against the revised estimates (RE) of ₹17.65 lakh crore.
  • Total expenditure too was higher at ₹37.94 lakh crore against the RE of ₹37.7 lakh crore presented to Parliament on February 1, 2021.
  • The revenue deficit at the end of the fiscal was 4.37% for FY22.
  • The government is expecting the fiscal deficit for the current financial year at 6.4% of GDP, or ₹16.61 lakh crore.
  • Revenue collections were about ₹27 lakh crore
  • Almost ₹5 lakh crore above the budget estimates.
  • There was a growth of about 35% over the last year's revenue collection
  • Growth of about 50% in direct taxes and about 20% growth in indirect taxes.
  • The spurt in tax revenues, especially GST collection, was mainly a result of DGARM, which is the Data Analytics wing of the GST Council.

Outlook for FY23

  • There are several risks to the fiscal deficit target of ₹16.6 lakh crore:
  • Revenue loss to the Centre on account of the excise duty cut
  • Lower-than-budgeted transfer of the RBI’s surplus
  • Additional spending on food, fertilizer and LPG subsidies.

Exam Track

Prelims Takeaway

  • Fiscal deficit
  • Revenue deficit
  • GST council
  • Tax and expenditure receipt