The center will hold the fiscal deficit at a target of 6.4% for gross domestic product this fiscal year, despite possible variability in income and expenses from each revised estimate, the economy said. Problems Director Ajay Seth told FE.
Seth said economic growth of 6.5% next year was likely and “reasonable” and that the negative impact on India of banking crises in advanced economies due to capital outflows could be managed thanks to strong foreign exchange reserves. said.
Concerned about the possible shortfall in tax revenues and thus a slight deviation from the budget deficit target for this year, officials said that given a large budget with multiple people responsible for collecting expenditures and revenues, several He said there is always some variation under the people in charge.
However, the revised capex target of Rs 7.3 trillion will be met in FY23, he said.
“Given the positives and negatives, we are fairly confident that the 6.4% budget deficit target will be met,” Seth said, noting that spending up to the Revised Estimate (RE) level will not affect any ministry. “After that, how much we can actually spend depends on each ministry’s ability to spend. It is certain that more or less ministries will reach the RE level.”
The Center’s expenditure increased by Rs 2.42 trillion or 6.14% to Rs 41.87 trillion from the Budget Estimate (BE) of Rs 39.44 trillion in RE to meet the increased revenue expenditure on subsidies including food and fertilizer. . Net tax revenue target for FY23RE was raised by 8% to Rs 20.87 trillion, 81% achieved by January.
The 2nd Supplementary Request for FY23 Subsidies, submitted to Parliament on 13 March, agreed to spend an additional Rs 1.48 trillion on a net basis, leading analysts to reduce the RE level from Rs 17.55 trillion to It suggested that there may be slight deviations in the fiscal deficit. Most of the supplementary expenditure was accounted for in his 2023 RE, but an additional fertilizer subsidy of 29,656 kroner was provided on top of the RE.
FE had reported that by March 5, the center had released Rs 3.1 trillion to the state, or about 70% of Central Support Scheme (CSS) expenditure for FY2013. Of his 3.1 trillion rupees released, more than 1.75 trillion rupees or 56% were still held in state Single Node Agencies (SNA). In addition, about 40,000 rupees sit idle in the treasury from the Center’s previous year’s release (before 2023 release) for such a scheme. The center is unlikely to release additional his CSS funding to the state in his March. CSS savings may offset revenue shortfall in 2023.
On economic growth, Seth said he expects economic growth to be close to 7% this year. “There is likely to be some easing next year. Economic surveys show him in the range of 6-6.8%, but around 6.5% seems reasonable next year,” he said.
Few positive things have happened, such as oil prices falling, but that’s good for the economy, he added.
Brent crude fell 2.1% to $73.11 a barrel on Friday, up more than 11% in a week amid concerns that the ongoing banking crisis in the US and Europe could hit the broader economy. fell.
India, a major importer of crude oil, natural gas and fertilizers, could benefit from lower global commodity prices on multiple fronts, including managing inflation, reducing subsidies and reducing costs for industries. However, analysts believe a further global economic slowdown could also hit India’s exports and economic growth.