New Delhi: The Controller General of Accounts is expected to release the fiscal deficit data for the first quarter of the financial year 2022-23 (Q1FY23) on Friday. The revenue, expenditure and fiscal deficit data are expected to align with previous years’ trends (as a percentage of full-year targets), due to what officials, including Union Finance Minister Nirmala Sitharaman, have termed “first quarter lethargy.”
It is in Q2 that outlays are expected to pick up, especially on capital expenditure (capex), as Rs 1 trillion in long-term capex loans to states are expected to be disbursed.
The fiscal deficit for April through May of FY23 was 12.3% of the Rs 16.6 trillion full-year fiscal deficit projection.
The budget deficit in Q1FY22 was 18.2% of the objective for that quarter.
As reported by Business Standard earlier, the Centre’s capex outlay for Q1FY23 could be close to Rs 1.5 trillion. As a percentage of full-year Budget estimates of Rs 7.5 trillion, it is expected to be at a similar level as in the past few fiscal years.
Senior officials said that the finance ministry is satisfied so far with the pace of capex by various infrastructure ministries and constant monitoring of the big ticket infrastructure projects shows that the money is being spent effectively.
Capex totaled Rs 1.1 trillion in Q1FY22, or around 20% of the full-year target of Rs 5.5 trillion.
An expenditure on capital projects of Rs 1.5 trillion in Q1 FY23 would be equivalent to an expenditure on BE of Rs 7.5 trillion.
One trillion rupees of this sum will be given as 50-year loans to states for capital expenditures.
The Center has made Capex on high multiplier infrastructure projects the cornerstone of its resuscitation plans. It is sticking to it in the current context when GDP is being hampered by global challenges, while the economy recovers from two years of the Covid-19 pandemic.
“The route we have chosen and the one we are sticking with is capex. Even during the pandemic, we adopted this method of spending on capital assets, and made sure the economic revival happens. And states really showed that they had the absorptive capacity,” Sitharaman had told Business Standard in earlier.
