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IndiaFiscal slippage in FY23 likely as govt seeks to spend Rs...

Fiscal slippage in FY23 likely as govt seeks to spend Rs 1.5 trn more




The government may be staring at a modest slippage in fiscal deficit for 2022-23 (FY23), with the Ministry of Finance seeking parliamentary approval for additional spending through a second and final tranche of supplementary demands for grants.

As the session of Parliament resumed, Finance Minister Nirmala Sitharaman sought Parliament approval for additional gross spending of Rs 2.7 trillion in FY23 (which ends on March 31). While net cash outgo is pegged at Rs 1.48 trillion, the rest will be matched by savings or enhanced receipts, the finance ministry said.

In December last year, the finance ministry got parliamentary approval to spend an additional Rs 3.26 trillion (net cash outgo) under the first tranche of supplementary demands for grants for FY23.

The additional spending demands are dominated by fertiliser subsidies, pensions, the allocation for universal service obligation fund (USOF), and the goods and services tax (GST) compensation to states and Union Territories (UTs).

Aditi Nayar, chief economist at ICRA, said although a portion of the net cash outgo may be offset by savings under other heads, it has raised the likelihood of a modest slippage relative to the Revised Estimates of FY23 fiscal deficit of Rs 17.6 trillion.

“Regardless, bond yields are likely to take cues from global yields and the expectations of monetary tightening at the upcoming policy review,” she added.

The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.


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