Business Line - The union government would be able to meet the fiscal deficit target set forth in the Budget 2022-23, despite burgeoning expenditure, on the back of higher tax collections driven by higher-than-budgeted nominal GDP growth in FY23, according to India Ratings and Research. Read more
The government's finances during April-November 2022 appear to be in a much better position than that during the corresponding period last fiscal, aided by the encouraging and resilient recovery, the ratings agency says.
India Rating and Research estimates that the gross tax collections for FY23 would grow 14.7% year-on-year to ₹31.06 lakh crore higher than the budgeted ₹27.62 lakh crore, on account of the substantial improvement in direct tax collections.
While the direct tax collections are pegged to grow 20.7% year-on-year due to the steep growth in corporate (18%) and income taxes (23.5%), the indirect taxes are projected to increase 8.4%, says Ind-Ra. As a result, the share of direct taxes in the gross tax revenue collections is projected to increase to a four-year high of 53.8% in FY23.
According to the ratings firm, the non-tax revenues are expected to come in higher at ₹3.05 lakh crore than the budgeted ₹2.70 lakh crore in FY23.
Ind-Ra says that the current expenditure of the Union government would be at ₹35.43 lakh crore, higher than the proposed current expenditure of ₹34.89 crore in FY23. However, the agency expects the capital expenditure of at ₹7.73 lakh crore to be lower than the proposed capital expenditure of ₹7.81 lakh crore in the same period.
As per the rating firms, the revenue and fiscal deficit to come in at ₹10.58 lakh crore and ₹17.61 lakh crore in FY23, which would be higher than the budgeted ₹9.9 lakh crore and ₹16.61 lakh crore, respectively, in FY23.
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