India: FY23 budget sees strong capex push, govt stays focused on fiscal consolidation

Nominal GDP growth to ease to 11.1% y/y in FY23 while Centre's debt is expected to inch up to 60.2% of GDP

Tax and non-tax collections are expected to remain strong with revenue receipts expected to rise 23.3% y/y

Capital spending to surge sharply, reaching 2.9% of GDP

Subsidies have been slashed significantly as the government scales back the pandemic-era support

Major chunk of the revenue expenditure will go towards interest payments, which will rise 16.2% y/y

Gross market borrowing would be at a record high of INR 15tn

The Centre will issue green bonds to fund public sector projects to help reduce the carbon intensity of the economy

Fiscal deficit of 6.4% of GDP for FY23, down from the revised estimates of 6.9% in FY22

No measures were announced to facilitate the inclusion of the nation's sovereign debt into global bond indexes

Proceeds from disinvestment are projected at INR 650bn in FY23 compared to INR 780bn in FY22, which was cut sharply from INR 1.75tn

The central bank will issue a digital currency in the next fiscal year, while income from transfers of virtual digital assets will be taxed at 30%