The fiscal deficit for April-May FY23 was 12.3% of the full-year fiscal deficit target of Rs16.6 lakh crore.  The fiscal deficit for April-June 2021 had accounted for 18.2% of the FY22 target. The government is targeting a fiscal deficit of Rs16.61 lakh crore for FY23, or 6.4% of GDP.On the expenditure side, the government's spending on major subsidies including food and fertilisers, came down around ₹68,000 crore during April-June period, compared to over Rs1 lakh crore a year earlier.

GST Collection Hits Nearly Rs 1.49 Lakh CroreIn July

The gross GST revenue collected in the month of July 2022 is Rs 1,48,995 crore of which CGST is Rs 25,751 crore, SGST is Rs 32,807 crore, IGST is Rs 79,518 crore (including Rs 41,420 crore collected on import of goods) and cess is Rs 10,920 crore (including Rs 995 crore collected on import of goods). This is second highest revenue since introduction of GST. The government has settled Rs 32,365 crore to CGST and Rs 26,774 crore to SGST from IGST. The total revenue of Centre and the States in the month of July 2022 after regular settlement is Rs 58,116 crore for CGST and Rs 59,581 crore for the SGST.

The revenues for the month of July 2022 are 28% higher than the GST revenues in the same month last year of Rs 1,16,393 crore. During the month, revenues from import of goods was 48% higher and the revenues from domestic transaction (including import of services) are 22% higher than the revenues from these sources during the same month last year. For five months in a row now, the monthly GST revenues have been more than Rs 1.4 lakh core, showing a steady increase every month. The growth in GST revenue till July 2022 over the same period last year is 35%.

Net direct tax collection in the April-June quarter of the current fiscal rose by 41%

Net direct tax collection in the April-June quarter of the current fiscal rose by 41% to ₹3,54,569.74 crore, Minister of State for Finance PankajChaudhary informed the LokSabha.During the April-June period of 2021-22, the government had collected a net direct tax of ₹2,50,881.08 crore. At the same time, net indirect tax collection including Goods and Services Tax (GST) and custom duty increased by 9.4% to ₹3,44,056 crore as against ₹3,14,476 crore in the first quarter of the previous fiscal, he said in a written reply. Various factors like rapid economic recovery post-COVID, better compliances due to various measures taken by the government have contributed to this increase," he said.

He also informed that no tax exemption has been granted to food items during the current financial year. Chaudhary said several steps had been taken by the GST Council to improve compliance, including auto population of distance based on the PIN Code in the e-waybill and automatic calculation of interest in the GSTR 3B for the delay in payment of GST liability.

India's long-term growth prospects embedded in public capital expenditure

Emphasising on higher public spending that would crowd in private investment, finance minister NirmalaSitharaman said that India's long-term growth prospects were embedded in public capital expenditure programmes. Besides, she also said that there is a need for immediate mobilisation and deployment of resources for health emergencies.Sitharaman's statement comes at a time when the country is facing tremendous inflationary pressures and demand slowdown due to supply chain disruption led by Russia-Ukraine conflicts and monetary policy tightening. The government has been focusing on increasing capital expenditure to push economic growth to revive economic recovery, especially after the Covid 19 pandemic.The government needs higher public spending that would crowd in private investment, she said.

Outlook:

The trend in personal tax filings is encouraging. Over 63.47 lakh income tax returns were filed till 10 pm on July 31, the last day for filing ITR for the 2021-22 fiscal by salaried individuals, the Income Tax department said. Taking the 63.47 lakh returns filed on the last day, the total number of ITRs for the 2021-22 fiscal filed till 10 pm went past 5.73 crore. This continues to show a continued uptrend in the tax collections from individuals despite challenging macroeconomic backdrop after the Covid-19 pandemic and spurt in inflation in recent months.