India's FY23 fiscal deficit likely to hit 6.7% on free grains move

Finance Minister Nirmala Sitharaman has pegged the Centre's capex for FY23 at Rs 7.5 trillion

The Narendra Modi government’s decision to extend the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) until September will increase the food subsidy outlay for 2022-23 (FY23) to Rs 2.86 trillion, from the Budget Estimates (BE) of Rs 2.06 trillion. This, coupled with high global commodity prices and their impact on fertiliser subsidies, has put the Centre’s fiscal deficit target for the coming year under stress, even before it begins.
 

Provided all other assumptions in the 2022 Union Budget remain the same, the calculations show that the Rs 80,000-crore outlay to extend PMGKAY will take the FY23 fiscal deficit BE to