Fiscal deficit in the first half of the current financial year (April – September) remained significantly lower than the moving average of the last five years on the back of tax buoyancy witnessed during the period, according to data shared by the ministry of finance.

In the statement on half yearly review of the trends in receipts and expenditure of the financial year 2022-23 released by the department of economic affairs, the ministry said, “Fiscal deficit in H1 of FY 2022-23 was about ₹6.20 lakh crore which was about 37.3% of budget estimate (BE) 2022-23 and significantly lower than five years’ moving average of 85.8%.”

The achievement has been helped by tax buoyancy in the economy. “Gross tax revenue and tax revenue (net to centre) up to September 2022 was ₹13.92 lakh crore (50.5% of BE) and ₹10.12 lakh crore (52.3% of BE), respectively as compared to ₹11.84 lakh crore (53.4% of BE) and ₹9.21 lakh crore (59.6% of BE) during H1, FY 2021-22,” the report said.

In the first half of the current financial year, the tax revenue (net to centre) at 52.3% of the budgeted amount was significantly higher than the last five years moving average of 41.6% of the budget estimate, the report pointed out.

“Non-Tax Revenue (NTR) during H1 of FY 2022-23 at 58.4% of BE 2022-23 (₹1.58 lakh crore) was also substantially higher than the last five years’ moving average of about 45.8 per cent of BE. Revenue Receipts [Tax Revenue (Net to Centre) and NTR] of the government in H1 of FY 2022-23 at about ₹11.70 lakh crore was 53.1% of BE. This was significantly higher than the five years’ moving average of 42.1% of BE. In the H1 of FY 2022-23, Direct Taxes and Indirect Taxes recorded a growth of 23.2% and 11.9 per cent, respectively over H1 of FY 2021-22,” the report said.

On the expenditure front, the Total Expenditure (Revenue Expenditure and Capital Expenditure) in H1 of FY 2022-23 at about ₹18.24 lakh crore was 46.2% of the budget estimate, as per the ministry. “Revenue expenditure was about ₹14.81 lakh crore, and Capital Expenditure was about ₹3.43 lakh crore in H1 of FY 2022-23 which was 49.5% higher than ₹2.29 lakh crore of H1 of FY 2021-22. The trend was in line with the Government’s focus on investing in infrastructure development with a historic push to capital expenditure and rationalization of revenue expenditure,” the report said.

The ministry also said in the report that the government is committed to strong macroeconomic fundamentals and financial stability. “The current global economy is navigating through incredibly rough waters attributed to global uncertainties, unfolding of conflict in Ukraine, the reaction of financial and commodity markets to the changing scenarios and tight monetary policy, etc. However, despite hurdles, the Indian economy has performed reasonably well compared to other major economies and has shown its resilience amidst the global slowdown and global uncertainties. The government of India remains committed towards strong macroeconomic fundamentals and financial stability,” it added.

Non-Tax Revenue (NTR)

Fiscal deficit at 37.3% in H1FY23; lower than five-year average