India's Fiscal Deficit For FY22 Settles Lower Than Estimated

A man holding Indian rupee banknotes. (Photo: Usha Kunji/Source: BQ Prime)

The central government's fiscal deficit for 2021-22 settled a tad lower than the revised estimate presented by it at the time of the budget, helped by stronger-than-expected revenue growth.

The fiscal deficit for the year settled at 6.7% of GDP compared to the estimated 6.9% of GDP, showed data released by the Controller General of Accounts. The revenue deficit was at 4.37% of GDP.

For April-March FY22:

Fiscal deficit settled at Rs 15.86 lakh crore (99.7% of revised estimate).
Revenue receipts was at Rs 21.68 lakh crore (104.3% of revised estimate).
Net tax revenue was at Rs 18.2 lakh crore (103.1% of revised estimate).
Total expenditure was at Rs 37.94 lakh crore (100.6% of revised estimate).
Capital expenditure was at Rs 5.93 lakh crore (98.5% of revised estimate).

"The provisional data indicates that the fiscal deficit of the Government of India was contained marginally below the FY22 revised estimate, benefiting from the higher tax (+Rs 0.55 lakh crore) and non tax (+Rs 0.34 lakh crore) revenue receipts and lower capital spending (-Rs 0.1 lakh crore), which absorbed the deficit in non debt capital receipts (-Rs 0.61 lakh crore) and higher revenue expenditure (+Rs 0.34 lakh crore)," said Aditi Nayar, chief economist at ICRA.

For the first month of the current fiscal:

Revenue receipts at Rs 1.96 lakh crore (8.9% of budget estimate).
Net tax revenue at Rs 1.84 lakh crore (9.5% of budget estimate).
Total expenditure at Rs 2.74 lakh crore (7% of budget estimate).
Capital expenditure at Rs 78,925 crore (10.5% of budget estimate).
Fiscal deficit at Rs 74,846 crore (4.5% of budget estimate).
The revenue account reported a small surplus in April.

"With a sharp 33% growth in revenue, and 9% rise in revenue expenditure, amid a robust 68% expansion in capital spending, the Government of India reported a rare revenue surplus and a fiscal deficit of Rs 0.7 lakh crore in April 2022, which was only mildly lower than the April 2021 level," Nayar said.