Even as fiscal deficit stood at around 12 per cent of budget estimate in first two months of the current fiscal, spending on urea subsidy and nutrient-based fertilizer subsidy surged to 50 per cent and 1140 per cent, respectively, as compared to corresponding period of last fiscal.

Data released by the Controller General of Accounts on Friday showed that spending on urea subsidy increased to over ₹15,000 crore during April-May of current fiscal as against around ₹10,000 crore of corresponding two months period of last fiscal. During the same period, expenditure on nutrient-based fertilizer subsidy jumped to over ₹9,400 crore as against over ₹750 crore.

However, officials do not see this rise as threatening annual estimate of subsidy expenditure. “Pending dues have been cleared. Also, stocks being lifted on to support kharif sowing, payout was higher,” an official said. Independent experts too do not see any requirement of revising the expenditure estimate. For FY24, the Budget has provided over ₹1.31-lakh crore for urea subsidy and ₹44,000 crore for nutrient-based fertilizers subsidy.

Aditi Nayar, Chief Economist with ICRA, said she expects the fertilizer budgetary allocation for FY2024 to remain sufficient. The government approved a subsidy of ₹38,000 crore towards P&K fertilizers for the FY2024 kharif season. In addition to this, the nutrient-based subsidy (NBS) rates for the kharif season for key nutrients N, P, K and S have been revised downwards, in line with the fall in international fertiliser and key raw material prices, she added.

Fiscal deficit

Meanwhile, CGA data showed that the Central government’s fiscal deficit stood at ₹2.1-lakh crore or 11.8 per cent of the full-year budget estimates towards May-end 2023. The fiscal deficit was 12.3 per cent of 2022-23 BE a year ago. Fiscal deficit is the difference between the total expenditure and revenue of the government. It is an indication of the total borrowings that are needed by the government.

In actual terms, the deficit was ₹2,10,287 crore at May-end 2023. In the Union Budget, the government aimed to bring down the fiscal deficit during the current financial year 2023-24 to 5.9 per cent of the gross domestic product (GDP). The deficit was 6.4 per cent of the GDP in 2022-23 against the earlier estimate of 6.71 per cent.

Unveiling the revenue-expenditure data of the Union Government for the first two months of 2023-24, CGA said the net tax revenue was ₹2.78-lakh crore or 11.9 per cent of the BE. Its total expenditure was ₹6.25-lakh crore or 13.9 per cent of the estimates presented in the Union Budget for the current fiscal.

Nayar felt higher than budgeted dividend surplus transfer of ₹87,420 crore from the RBI is “likely to provide some cushion to meet any undershooting in other revenues streams.

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