Fiscal deficit for 2021-22 improved to 6.71% of the GDP over the revised budget estimate of 6.9% mainly on account of higher tax realisation. Unveiling the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) said that the fiscal deficit in the absolute terms was Rs 15,86,537 crore (provisional). The finance ministry in February had estimated the deficit at Rs 15,91,089 crore or 6.9% of GDP.
According to the data, the tax receipts during the fiscal were at Rs 18.2 lakh crore as against the revised estimates (RE) of Rs 17.65 lakh crore. The total expenditure too was higher at Rs 37.94 lakh crore against the RE of Rs 37.7 lakh crore presented to Parliament on February 1, 2021. CGA further said the revenue deficit at the end of the fiscal was 4.37% for fiscal 2021-22.
In another set of data, the CGA said the fiscal deficit during the first month of 2022-23 was 4.5% of the Budget Estimate for the current fiscal. The deficit was 5.2% in the year-ago period. The government expects the fiscal deficit for the current financial year at 6.4% of GDP or Rs 16.61 lakh crore.
In April 2022, there was a revenue surplus of Rs 591 crore. Government meets its fiscal deficit from market borrowings.
Commenting on the data, Vivek Jalan, Partner, Tax Connect Advisory, said the revenue collections were around Rs 27 lakh crore, almost Rs 5 lakh crore above the budget estimates of around Rs 22 lakh crore. There was a growth of around 35% over the last year's revenue collection, led by growth of around 50% indirect taxes and supported by around 20% growth in indirect taxes, he said.
"The spurt in tax revenues, especially GST Collection was mainly a result of DGARM, which is the Data Analytics wing of the GST Council," Jalan said.
Aditi Nayar, Chief Economist, ICRA said the provisional data indicates that the fiscal deficit of the Union government was contained marginally below the 2021-22 revised estimate, benefitting from the higher tax and non-tax revenue receipts and lower capital spending, which absorbed the deficit in non-debt capital receipts and higher revenue expenditure.
On the outlook for 2022-23, she said there are several risks to the fiscal deficit target of Rs 16.6 lakh crore for 2022-23, emanating from the revenue loss to the Centre on account of the excise duty cut, lower-than-budgeted transfer of the RBI's surplus, and the need for additional spending on food, fertilizer and LPG subsidies through the year.
For the last financial year, the government had initially pegged the fiscal deficit at 6.8% of the GDP in the budget presented in February 2021.
The government in the revised estimates in the Budget for 2022-23 forecast a higher fiscal deficit of 6.9% of the GDP or Rs 15,91,089 crore for the fiscal ended in March.