The government will maintain its 5.9 percent budget deficit objective for FY’24

According to T V Somanathan, the finance secretary, the government would maintain its fiscal deficit goal of 5.9% of GDP since strong tax and non-tax revenues will assist pay for necessary expenditures and make up for any shortfall in disinvestment gains.

He said that even though disinvestment would leave a gap, this gap will be filled by mobilizing non-tax income.

“It’s doubtful we’ll reach the disinvestment aim. But overall, the sum of disinvestment and non-tax income is probably going to be pretty close to the budget, he said in an interview with PTI.

According to him, the sum of disinvestment revenues and non-tax receipts would probably be pretty close to the budget estimates.

“This year, we anticipate staying under our budget deficit objective…Nothing that has happened so far has prompted us to stray from it, he added.

In addition to expecting greater dividends from public sector banks and other PSUs than projected in the budget, the government has already received a bigger payout from the Reserve Bank of India.

In May, the Reserve Bank of India authorized a dividend payment to the federal government of Rs 87,416 crore, almost treble the amount it had made the year before.

In the current fiscal, the government anticipated receiving Rs 48 billion from the RBI, public sector banks, and financial institutions.

For the fiscal year 2021–2022, the RBI paid out Rs 30,307 crore in dividends.

The government’s income from public sector banks is probably going to increase given that they posted fiscal 2022–23 record profits of over Rs 1 lakh crore.

According to estimates in the budget by Finance Minister Nirmala Sithartaman, the fiscal deficit in BE 2023–24 would be 5.9% of GDP.

The expected net market borrowings from dated securities for the budget deficit in 2023–24 is Rs 11.8 lakh crore. Small savings and other sources are anticipated to provide the remaining money. The expected overall market borrowings is Rs 15.4 lakh billion.

The Finance Minister requested that the entire income other than borrowings and the total expenditure be anticipated at Rs 27.2 lakh crore and Rs 45 lakh crore, respectively, in the budget estimates for 2023–24. Additionally, it is predicted that net tax collections would total Rs 23.3 lakh crore.

The government wants to continue on the road of fiscal consolidation and reduce the budget deficit to less than 4.5% of GDP by 2025–2026.