In her 2023-24 budget, Finance Minister Nirmala Sitharaman lowered the budget deficit target. The fiscal deficit in the 2023-24 budget is projected to be 5.9% of GDP compared to 6.4% in the revised estimates for 2022-23. In absolute terms, the budget deficit in the 2023-24 budget is expected to be Rs 17.87 lakh crore compared to Rs 17.55 lakh crore in RE 2022-23.
Below are the key numbers behind Sitharaman’s fiscal strategy as he projected it in the 2023-24 budget:
Revenue receipts (tax and non-tax)
Gross tax revenue is projected to increase by 10.4% in Budget Estimates (BE) 2023-24 compared to Revised Estimates (RE) 2022-23. Direct and indirect tax revenues are expected to increase by 10.5% and 10.4%, respectively. In BE 2023-24, direct and indirect taxes are estimated to contribute 54.4% and 45.6% respectively to gross tax revenue.
Tax revenue (net center)
In BE 2023-24, tax revenue (net in center) is projected at Rs 23.31 lakh crore, about 11.7% higher than Rs 20.87 lakh crore of RE 2022-23.
Tax-to-GDP ratio
In BE 2023-24, the tax/GDP ratio is estimated at 11.1%, which is at par with the ER of 2022-23.
Non-tax revenue
In BE 2023-24, the NTR is estimated to contribute 11.5% of income received and is expected to be at Rs 3.02 lakh crore, 15.2% higher than the 2022-23 BR of Rs 2.62 lakh crore.
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Central government tax revenue is estimated at Rs 23.48 lakh crore and Rs 26.32 lakh crore in RE 2022-23 and BE 2023-24, respectively
Non-debt capital receipts
Non-debt related capital revenue is estimated at Rs 84,000 crore in BE 2023-24 compared to Rs 83,500 crore in RE 2022-23.
Total of expenses
The Centre’s total expenditure in BE 2023-24 is estimated at around Rs 45.03 lakh crore, an increase of 7.5% from RE 2022-23. Capital expenditure is a major contributor to total expenditure growth in BE 2023-24.
Capital expenditure
The budget for the financial year 2023-24 provides more than Rs 10 lakh crore (3.3% of GDP) for capital expenditure. This represents a steep increase of 37.4% in the investment budget in BE 2023-24 from Rs 7.28 lakh crore in RE 2022-23.
Financial assistance to States
The Capital State Financial Assistance Scheme
the expenditure introduced in the financial year 2022-23 was extended in the financial year 2023-24, with an increased expenditure of Rs 1.30 lakh crore. This represents an increase of 30
11% compared to the BE 2022-23 allocation and represents almost 0.4% of GDP for the 2023-24 financial year.
Income Expenditure
Expenditure on the revenue account was estimated at around Rs 35.02 lakh crore (11.6% of GDP) in BE 2023-24, registering a growth of 1.2% from Rs 34.59 lakh crore in RE 2022-23.
Interest payments
In BE 2023-24, interest payments are estimated, based on the prevailing interest rate for various securities, at Rs 10.80 lakh crore, or 30.8% of total expenditure and 41.0% of Center revenue.
Major Grants
Another significant portion of revenue and expenditure is major subsidies, which include food, fertilizer, and oil subsidies. Major subsidies at Rs 3.75 lakh crore (1.2% of GDP) account for 10.7% of tax expenditure in BE 2023-24. in BE 2022-23 mainly due to the expansion of the free food grain program and increased fertilizer subsidy spending.
Fiscal devolution to states
Fiscal decentralization to the states, as recommended by the 15th Finance Committee, amounts to Rs 10.21 lakh crore in BE 2023-24. The decentralization of state tax share which was estimated at around Rs 8.17 lakh crore in BE 2022 -23 has been significantly improved in RE 2022-23 to around Rs 9.48 lakh crore due to increase in tax revenues.
Loans
The central government has planned gross and net borrowing via dated securities (G-Sec and T-Bills) of around Rs 15.43 lakh crore and Rs 12.31 lakh crore, respectively, in BE 2023-24, i.e. 8 .6% and 1.9% higher than gross borrowings of Rs 14.21 lakh crore and net borrowings of Rs 12.08 lakh crore in RE 2022-23. However, as a percentage of GDP, gross and net borrowing are expected to decline to 5.1% and 4.1%, respectively, in BE 2023-24, from 5.2% and 4.4%, respectively, in RE 2022-23.
Borrow from NSSF
To finance the budget deficit in BE 2023-24, borrowing from the National Small Savings Fund is estimated at around Rs 4.71 lakh crore; while those from external sources and state provident funds are estimated at Rs 22,118 crore and Rs 20,000 crore, respectively. Of the total budget deficit financing, the share of net market borrowing and NSSF is 68.9% and 26.4%, respectively, in BE 2023-24.
Public debt
Total public debt including external debt at Center book value is estimated at Rs 152.54 lakh crore in BE 2023-24 compared to Rs 135.91 lakh crore in RE 2022-23. As a percentage of GDP, total public debt is expected to fall from 49.8% of GDP in RE 2022-23 to 50.6% of GDP in BE 2023-24.
Debt to GDP ratio
If the external debt is valued at the current exchange rate, the public debt/GDP ratio is estimated at 51.3% in BE 2023-24. A full estimate of central government debt with an expanded definition is 57.2% of GDP in BE 2023-24.
Balance between revenue revenue and revenue expenditure
The total revenue and expenditure of the Center is estimated at Rs 26.32 lakh crore and Rs 35.02 lakh crore, respectively, in BE 2023-24. On this basis, the revenue/expenditure ratio is estimated at 75.2% in BE 2023-24, compared to 67.9% and 67.8% respectively in RE 2022-23 and 2021-22. The improvement in the ratio is mainly due to the rationalization of revenue expenditure and the stability of the tax-to-GDP ratio. After adjusting for subsidies for the creation of fixed assets, the revenue/expenditure ratio is estimated at 83.9% in BE 2023-24.
Capex-FD ratio
The ratio of capital expenditure to budget deficit (Capex-FD) broadly measures the extent of borrowed resources used to finance government capital expenditure. The ratio is estimated at 56.0% in BE 2023-24, compared to 41.5% in RE 2022-23 and 37.4% in 2021-22. Over time, this ratio has improved thanks to the measures taken by the government to stimulate capital expenditure.
