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Against an estimated nominal GDP of around Rs 302 lakh crore, which translated into 10.5% growth, the National Statistical Office has now pegged it at over Rs 296 lakh crore for 2023-24, which will be an expansion of 8.9%.Nominal GDP is calculated on current prices and does not take into account the impact of inflation.
Finance minister Nirmala Sitharaman had estimated the fiscal deficit at Rs 17,86,816 crore, which worked out to 5.9% of the earlier nominal GDP estimate. With the new estimate, at the budgeted level, the fiscal deficit is expected to be a shade above 6% of GDP.
Buoyant tax collections and dividend receipts are expected to more than make up for the expected shortfall from disinvestment. With stock markets remaining strong and companies showing healthy growth, DIPAM will seek to raise more resources.
On the spending front, the Centre will have a bigger challenge ahead of elections, as it has already had to spend more than what it had originally expected. Going forward, however, ministries will have to tighten their seatbelts and the finance ministry is likely to be stingy in allowing further expenditure. Besides, several ministries lagging in spending the allocated funds may be required to surrender the money.
“Fiscal deficit at the end of November 2023 stood at Rs 9,06,000 crore or 50.7% of BE (budget estimate). However, taking into account the revised GDP figures of today, if tax receipts grew by the BE, then government has to curtail spending by Rs 37,178 crore without changing the FD (fiscal deficit) target of 5.9% of GDP in FY24,” said Soumya Kanti Ghosh, group chief economic adviser at State Bank of India.
