FISCAL DEFICIT ESTIMATED AT 6.4% OF GDP IN 2022-23

BROAD PATH OF FISCAL CONSOLIDATION MAINTAINED TO REACH FISCAL DEFICIT LEVEL BELOW 4.5%

CAPITAL EXPENDITURE STEPPED UP BY 35.4% TO ₹ 7.50 LAKH CRORE IN 2022-23 FROM ₹ 5.54 LAKH CRORE IN 2021-22

CAPITAL EXPENDITURE OUTLAY IN 2022-23 TO BE 2.9% OF GDP

TOTAL MARKET BORROWINGS OF GOVERNMENT FOR 2022-23 ESTIMATED TO STAND AT ₹ 11, 58,719 CRORE

“The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by me last year to reach a fiscal deficit level below 4.5 per cent by 2025-26” announced the Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, while presenting the Union Budget 2022-23 in the Parliament here today. Further, the Revised Fiscal Deficit in the current year is estimated at 6.9 per cent of GDP as against 6.8 per cent projected in the Budget Estimates.

Fiscal Deficit

The Finance Minister stated that while setting the fiscal deficit level in 2022-23, she has been conscious of the need to nurture growth, through public investment, to become stronger and sustainable. The Fiscal Deficit of the Government for 2022-23 is estimated to be ₹ 16, 61,196 crore.  The Revised Estimates for 2021-22 indicate a Fiscal Deficit of ₹ 15, 91,089 crore as against the Budget Estimates of ₹ 15, 06,812 crore.

Capital Expenditure

The Finance Minister stated that the outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from ₹ 5.54 lakh crore in the current year to ₹ 7.50 lakh crore in 2022-23. This has increased to more than 2.2 times the expenditure of 2019-20. This outlay in 2022-23 will be 2.9 per cent of GDP.

With Capital Expenditure taken together with provision made for creation of capital assets through Grants-In-Aid to States, the ‘Effective Capital Expenditure’ of the Central Government is estimated at ₹ 10.68 lakh crore in 2022-23, which will be 4.1% of GDP, informed the Minister.

The total expenditure in 2022-23 is estimated at ₹ 39.45 lakh crore, while the total receipts other than borrowings are estimated at ₹ 22.84 lakh crore. She further added that as against a total expenditure of ₹ 34.83 lakh crore projected in the Budget Estimates 2021-22, the Revised Estimate is ₹ 37.70 lakh crore.

Market Borrowings

The total Market Borrowings of the government for 2022-23 are estimated to stand at ₹ 11,58,719 crore. The Revised Estimates for the same for 2021-22 are ₹ 8, 75,771 crore as against the Budget Estimates of ₹ 9, 67,708 crore.

 

Fiscal deficit estimate signals continued fiscal consolidation while prioritising stepped-up capital expenditure and planned market borrowings. Fiscal deficit for 2022-23 is estimated at 6.4% of GDP, consistent with a fiscal consolidation path targeting a deficit below 4.5% by 2025-26 while supporting growth through public investment. Capital expenditure is increased by 35.4% to raise central capital outlay to 2.9% of GDP and, with Grants-in-Aid to States, produce an Effective Capital Expenditure of 4.1% of GDP. Market borrowings are planned to meet financing needs.