Heeding the call for fiscal prudence from several quarters, finance minister Nirmala Sitharaman did not resort to populism in an election year and continued on the path of fiscal consolidation in the Union Budget 2023-24.
The finance minister has set a fiscal deficit target for 2023-24 at 5.9 per cent of GDP, continuing on the earlier announced glide path to reduce it to 4.5 per cent by 2025-26.
“In my Budget Speech for 2021-22, I had announced that we plan to continue the path of fiscal consolidation, reaching a fiscal deficit below 4.5 per cent by 2025-26 with a fairly steady decline over the period. We have adhered to this path, and I reiterate my intention to bring the fiscal deficit below 4.5 per cent of GDP by 2025-26.
The 5.9 per cent estimate would be a reduction of 50 basis points from this year’s target of 6.4 per cent. As per data released on January 31, the Centre’s fiscal deficit for the first nine months of 2022-23 accounted for 59.8 per cent of the full-year target.
The Budget math
The government estimates the total receipts other than borrowings at Rs 27.2 lakh crore while the total expenditure is estimated at Rs 45 lakh crore. The net tax receipts are estimated at Rs 23.3 lakh crore.
To finance the fiscal deficit in 2023-24, the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 15.4 lakh crore.
Revised Estimates 2022-23
The Revised Estimate of the total receipts other than borrowings is Rs 24.3 lakh crore, of which the net tax receipts are Rs 20.9 lakh crore. The Revised Estimate of the total expenditure is Rs 41.9 lakh crore, of which the capital expenditure is about Rs 7.3 lakh crore.
The Revised Estimate of the fiscal deficit is 6.4 per cent of GDP, adhering to the Budget Estimate.