Govt's fiscal deficit narrows to 6.4% of GDP for FY23, meets target

The fiscal deficit for the last financial year narrowed to 6.4% from a year earlier. It also met the budget gap target, aided by buoyant tax receipts and some fiscal headroom from lower payments

Fiscal deficit for the previous financial year (FY23) narrowed to 6.4 per cent of gross domestic product (GDP) year-on-year (YoY), according to the data from the Controller General of Accounts (CGA) released on Wednesday.

According to the data, it also met the budget gap target, aided by buoyant tax receipts and some fiscal headroom from lower payments.

While announcing the budget for the current financial year, Finance Minister Nirmala Sitharaman, in the Lok Sabha on February 1, had retained India’s aim to narrow the fiscal gap to 6.4 per cent of GDP from 6.7 per cent in the last financial year, the fiscal deficit target for 2023-24 was pegged at 5.9 per cent of the GDP.

Aiming to reach a fiscal deficit level below 4.5 per cent of the GDP by 2025-26, India has set a target to further narrow the deficit for 2023-24 to 5.9 per cent.

Unveiling the revenue-expenditure data of the Union government for 2022-23, the CGA said that the fiscal deficit in absolute term was Rs 17,33,131 crore (provisional).

The government borrows from the market to finance its fiscal deficit.
 

CGA further said the revenue deficit worked out to be 3.9 per cent of GDP, while the effective revenue deficit was 2.8 per cent of GDP.