Robust tax and non-tax revenues helped the Centre to contain fiscal deficit at 58.9% of the revised estimate (RE) in April-January of FY22, compared with 66.8% of the relevant RE in the year ago period.
Even though total expenditure rose at a faster pace than budgeted to achieve the full-year target, capex grew only 22% on year as against the required rate of 41% to meet the FY22 target. In fact, capex declined by 6% on year in the month of January.
Despite the slower pace, capex achievement for the current financial year will still be very close to the annual target of Rs 6 lakh crore, an official said, adding that often bills are cleared in bunches.
The Centre may rein in fiscal deficit at slightly below the targeted 6.9% of GDP due to overall buoyancy in tax revenues, assuming that LIC IPO (Rs 60,000 crore factored in non-debt receipts) will go through by March 31.
In the first 10 months of FY22, the Centre’s net tax receipts rose 40% on year to Rs 15.47 lakh crore or 87.7% of FY22RE compared with 82% of the corresponding target reported in the year-ago period.
Total expenditure in the first 10 months of the current financial year stood at Rs 28.09 lakh crore, up 12% on year as against a required rate of 7% to achieve the FY22 target of Rs 37.7 lakh crore, as the Centre released an additional installment tax devolution to states during January to augments states’ cash flows to maintain their capex momentum.
Data released by the Controller General of Accounts on Monday put the Centre’s fiscal deficit for April-January of FY22 at Rs9.38 lakh crore as against the RE of Rs 15.91 lakh crore.