Receipts and Expenditure of the Central Government from 2016 to 2024

Looking at revenue patterns, the government’s total revenue receipts have shown resilience, increasing from ₹13.74 lakh crore (8.9% of GDP) in 2016-17 to ₹27.28 lakh crore (9.2% of GDP) in 2023-24. Within this, tax revenue has remained the backbone of government income, with net tax revenue (after states’ share) growing from ₹11.01 lakh crore (7.2% of GDP) to ₹23.26 lakh crore (7.9% of GDP), indicating improved tax collection efficiency over the years. The expenditure side reveals interesting trends, particularly during the pandemic period. Total expenditure increased from ₹19.75 lakh crore (12.8% of GDP) in 2016-17 to ₹44.42 lakh crore (15% of GDP) in 2023-24. A significant spike occurred in 2020-21, when expenditure reached 17.7% of GDP, reflecting the government’s expansionary fiscal policy to combat the COVID-19 crisis. Major subsidies, which normally hovered around 1-1.3% of GDP, peaked at 3.6% of GDP (₹7.07 lakh crore) in 2020-21, demonstrating the government’s welfare response during the pandemic.

The fiscal deficit trajectory tells a story of challenges and gradual consolidation. Starting at 3.5% of GDP in 2016-17, it remained relatively stable until 2019-20. However, it witnessed a sharp increase to 9.2% of GDP in 2020-21 due to pandemic-related expenditures and revenue shortfalls. Since then, there has been a consistent effort at fiscal consolidation, bringing the deficit down to 5.6% of GDP in 2023-24. The primary deficit (fiscal deficit minus interest payments) shows a similar pattern, peaking at 5.7% of GDP in 2020-21 before moderating to 2% in 2023-24. Interest payments have shown a steady increase from 3.1% to 3.6% of GDP (₹4.80 lakh crore to ₹10.63 lakh crore in absolute terms), reflecting the cumulative impact of borrowings. Defence expenditure has remained relatively stable at around 1% of GDP. However, in absolute terms, it has grown from ₹1.65 lakh crore to ₹2.90 lakh crore, indicating a sustained focus on national security while maintaining fiscal discipline. Capital expenditure shows a promising trend, increasing from 1.8% to 3.2% of GDP (₹2.84 lakh crore to ₹9.48 lakh crore), suggesting a stronger focus on infrastructure and long-term asset creation. This shift towards capital spending while managing revenue expenditure indicates a strategic reorientation towards growth-inducing expenditure.

These trends collectively suggest that while the government has maintained fiscal discipline in normal times, it has shown flexibility during crises, followed by determined efforts at consolidation. The increasing focus on capital expenditure, coupled with stable tax revenues, indicates a movement towards a more investment-led growth model while maintaining social sector commitments.