India's fiscal deficit widens to Rs. 9.82L crore in April-December
India's fiscal deficit rose to Rs. 9.82 lakh crore between April-December 2023 from Rs 9.07 lakh crore between April-December in 2022. Fiscal deficit is the difference between government's revenue and expenditure. The April-December 2023 fiscal deficit figure accounts for 55% of the full-year target of Rs. 17.87 lakh crore. In contrast, the fiscal deficit during April-December 2022 was 59.8% of the target for the financial year 2022-23.
Comparing fiscal deficit with previous year
The fiscal deficit in December 2023 alone reached Rs. 75,694 crore, over five times higher than in December 2022. However, the overall fiscal deficit for April-December 2023 decreased by 1% year-on-year. The data arrived a day before Finance Minister Nirmala Sitharaman is expected to announce a fiscal deficit target of 5.3% of GDP for 2024-25 in the interim Budget.
Surge in capital expenditure contributed to higher fiscal deficit
A significant factor behind increased fiscal deficit in December was a substantial rise in capital expenditure, which more than doubled year-on-year to Rs. 87,985 crore. This brought the total capital expenditure for the year to Rs. 6.74 lakh crore. The increase in capital expenditure is a positive sign after it had slowed down in recent months, causing economists to speculate that the Centre might not reach its record target of Rs. 10 lakh crore for the financial year 2023-24.
Details on government's spending and income
From April to December in 2023, government's spending reached Rs. 30.54 lakh crore, or 67.8% of full-year target and outpaced the first nine months of 2022-23 by 8.4%. During the same period, the government's total revenue was up 13.5% at Rs. 20.72 lakh crore.
