Govt leans heavily on nominal revenue growth to beat fiscal blues

If the burden does hit Rs 2.5 trillion, that would mean extra spending of around Rs 35,000 crore

Only two months into the current fiscal year (FY23), it is now clear that the budgeted fiscal deficit target of 6.4 per cent of GDP is a tall task due to a number of reasons. These include revenue forgone because of excise duty cuts on petrol and diesel and other items, and a higher expenditure burden due to food and fertiliser subsidies.

In such a situation, the Centre is looking at eliminating wasteful expenditure in welfare and subsidy schemes. But there could be two silver linings: Inflation, and the Centre’s own conservative budget estimates (BE) for FY23. It is a norm