Conservative receipts lead to higher fiscal deficit than expected: MOFSL

The total expenditure in the Union Budget is estimated at about Rs 39.45 lakh crore

While the total receipts other than borrowing are targeted at Rs 22.84 lakh crore

According to MOFSL, “Based on provisional data and historical trends up to December 2021, our estimates suggest that revenues of up to Rs 1.7 trillion in FY22E and up to Rs 2 trillion in FY23E will be higher than the revised estimates.”

“However, the Life Insurance Corporation (LIC) could be difficult without a public offering. It is confusing that the government expects $ 660 billion from February-March 2022.”

We believe that LIC and other investment exemptions may occur in FY23, i.e. FY22 will be in short supply (v / s FY22REs),

While FY23 is likely to reach even higher. A total of Rs. $ 1.2 trillion in FY22, total receipts $ 2-2.5 trillion higher than targets in FY23E. ”

In addition, the brokerage firm said the move would lead to higher fiscal deficits and market borrowings than expected.

“Such conservative receipt estimates are the main reason for the higher fiscal deficit than expected, thus, borrowing at FY22 / FY23 threatened the credit markets.”

“Despite good nominal GDP growth, the fiscal deficit has widened to 6.9 per cent of GDP in ‘FY22RE’ and is set at 6.4 per cent of GDP for FY23BE.”