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India’s 2022-23 fiscal deficit may come down to 6.5 per cent, says SBI Research

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India recorded a trade deficit of US$ 100 billion during the April-July period.

New Delhi:

SBI Research in its weekly report said India’s fiscal deficit, the gap between revenue and expenditure, is expected to be around 6.5 per cent of GDP, as against the budget estimate of 6.4 per cent.

The fiscal deficit for the first quarter of FY 2013 (April-June) has reached 21.2 per cent of the annual target as compared to 18.2 per cent in the same period of the previous fiscal.

The report said, “Tax revenue has remained strong with record high GST revenue which has been made possible by compliance and higher economic activity. On the expenditure side, the government has incurred high capital expenditure which augurs well for our growth potential. “

GST collections have increased significantly this year, with monthly collections staying above Rs 1.4 lakh crore for five consecutive months, the report said, adding that collections as a whole have remained strong with the impact of consumption.

India’s capital expenditure during the first quarter stood at 23.4 per cent of the budget estimate as against 20.1 per cent in the same period last year.

It noted that the government has announced several measures this financial year to contain rising inflation, including a cut in oil excise duty, additional fertilizer and gas subsidies, resulting in increased spending.

However, windfall tax and additional tax revenue on account of higher GST from the budget is expected to provide relief to the fiscal situation.

However, India’s trade deficit continues to widen and hit a record high of US$31 billion in July, mainly due to a fall in exports to US$35 billion from US$40 billion in the previous month, while imports remained strong at USD 66 billion.

Cumulatively, India recorded a trade deficit of USD 100 billion during the April-July period.

“If we annualize this trade deficit number, it is 8.5 per cent of our GDP estimates for FY13. Interestingly, it is 10.7 per cent of the GDP achieved in FY13. much less than the peak deficit of Rs.

On the current account deficit front, it revised estimates for 2022-23 from 3.2 per cent of GDP to 3.7 per cent. CAD is the difference between a country’s export value versus its imports.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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