Budget 2022: India’s fiscal deficit estimated at 6.9% for FY22, 6.4% for FY23: FM Nirmala Sitharaman

India’s fiscal deficit for the year financial year 2021-22 is estimated at 6.9 per cent versus the revised estimates of 6.8 per cent, Finance Minister Nirmala Sitharaman today said in her Union Budget 2022 speech. The FM said that fiscal deficit for FY23 is estimated at 6.4 per cent. It was her third full budget in the Narendra Modi 2.0 government.   

The fiscal deficit for 2020-21 stood at 9.3 per cent as against the Revised Estimates (RE) pegged at 9.5 per cent of the Gross Domestic Product (GDP).

Mitul Shah, Head of Research at Reliance Securities: "As we highlighted earlier government is preferring higher capital investments over fiscal discipline, which is visible from higher  fiscal deficit projected at 6.9% in FY22 and 6.4% in FY23, which is higher than street estimates. However it clearly reflects Pro growth road map of government in this pandemic situation. Its a need of an hour in this challenging business environment."

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The Finance Minister had in Union Budget 2021-22 speech said that India’s fiscal deficits were funded through Government borrowings, multilateral borrowings, Small Saving Funds and short term borrowings.

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The government had on Monday released the Economic Survey 2022. It was tabled in Lok Sabha by Finance Minister Nirmala Sitharaman.

Government revenues in 2021-22 witnessed a strong rebound with revenue receipts getting up over 67 per cent YoY in April-November 2021. “The Government will comfortably meet its targets for the year while maintaining the support, and ramping up capital expenditure,” the Economic Survey document said. “The strong revival in revenues means that the Government has fiscal space to provide additional support if necessary,” it further said.