The government remains committed towards strong macroeconomic fundamentals and financial stability despite global headwinds, a finance ministry report has said.
The current global economy is navigating through incredibly rough waters attributed to global uncertainties, the unfolding of conflict in Ukraine, the reaction of financial and commodity markets to the changing scenarios and tight monetary policy, etc.
“However, despite hurdles, the Indian economy has performed reasonably well as compared to other major economies and shown its resilience amidst the global slowdown and global uncertainties,” as per the statement on Half Yearly Review of the Trends in Receipts and Expenditure in relation to the Budget at the end of the first half of FY’23.
The budget 2022-23 was presented against the backdrop of recovery from the unprecedented Covid-19 crisis and clues of global uncertainties on account of the war in Ukraine, it said.
The fiscal policy led by favourable macroeconomic fundamentals ensured a higher pace of capital expenditure compared to last year to push for rapid infrastructure development, considering the multiplier effect of capital expenditure on the overall economy, it said.
The government has increased the allocation to capital expenditure by 35 per cent to Rs 7.5 lakh crore in 2022-23 as compared to Rs 5.5 lakh crore in the previous year. This is 2.9 per cent of GDP, the highest ever.
The Budget 2022-23 envisioned a stronger commitment towards capital expenditure along with keeping fiscal consolidation in sight, it said, adding, the Government of India (GoI) adopted a more calibrated fiscal path to strike a balance between growth and fiscal consolidation.
Though the hovering global uncertainties mainly due to the Russia-Ukraine war and tight monetary policy by major economies were the factors to watch, the stronger macro-economic fundamentals in 2021-22 provided an opportunity to focus on infrastructure building.
Gross Tax Revenue was estimated at about Rs 27.58 lakh crore with an implied tax-GDP ratio of 10.69 per cent. Total non-debt receipt of the Centre was estimated at about Rs 22.84 lakh crore consisting of Tax Revenue (Net to Centre) of about Rs 19.35 lakh crore, Non-Tax Revenue of about Rs 2.70 lakh crore, disinvestment receipts of Rs 0.65 lakh crore and receipts on account of recovery of loans of Rs 0.14 lakh crore.
With the above estimates of receipts and expenditure, the fiscal deficit was pegged at about Rs 16.61 lakh crore in BE 2022-23, which was 6.4 per cent of the GDP.
Fiscal deficit was planned to be financed by raising Rs 11.59 lakh crore from the market (G-sec + T-Bills) and the remaining amount of Rs 5.02 lakh crore from other sources such as NSSF, State Provident Fund, External debt etc, it said.
With regard to foreign exchange reserves, the report said these were USD 532.7 billion at end-September 2022 from a level of USD 638.6 billion at end-September 2021.
The average exchange rate was Rs 78.5 per USD during H1 of FY 2022-23 as compared to Rs 73.9 per USD in H1 of FY 2021-22, it said.
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