CHENNAI: The upcoming Indian budget for 2023-24 will be a challenging one for the government to follow the roadmap for fiscal consolidation amidst a global environment of declining inflation, said Soumya Kanti Ghosh, group chief economic adviser, SBI, in a report.
For India, this could make things difficult to set a nominal gross domestic product (GDP) number significantly higher than 10 per cent, with a deflator about 3.5 per cent. But this could also mean a higher GDP growth than anticipated at about 6.2 per cent, he said.
He also said the fiscal deficit of the Indian government for FY23 will be about Rs.17.5 lakh crore.
According to Ghosh, for FY23, total receipts of the Government would be higher than the budget estimates (BE) by around Rs 2.3 lakh crore, on account of higher direct tax receipts (about Rs 2.2 lakh crore), higher GST receipts (Rs 95,000 crore) but lower dividends (about Rs 40,000 crore), lower fuel tax net of cess (Rs 30,000 crore) and lower disinvestment receipts (about Rs 15000-20,000 crore).
“Meanwhile, expenditure is likely to be on the higher side of the BE by around Rs 3 lakh crore on account of higher subsidy bill and additional spending announced by the Government. Taking this into account, the fiscal deficit of the Government in FY23 is expected to come at Rs 17.5 lakh crore. However, higher nominal GDP growth (15.4 per cent) estimates will help in keeping the fiscal deficit at 6.4 per cent of the GDP,” Ghosh said.