scorecardresearch
Friday, Dec 02, 2022
Premium

Budget 2019: Govt expects Rs 90,000 crore dividend from RBI this fiscal; 32 per cent jump over FY19

Finance Secretary Subhash Chandra Garg said that the government expects Rs 90,000 crore as dividend from the RBI in the current fiscal. This is 32 per cent jump from the previous fiscal, when the central bank paid Rs 68,000 crore to the government including Rs 28,000 crore as interim dividend.

budget 2019, Reserve bank of india, RBI, India fiscal deficit, budget 2019 explained, nirmala sitharaman budget, explaining budget 2019, Nirmala Sitharaman, india budget 2019, Indian express As per Section 47 of the RBI Act, profits of the RBI are to be transferred to the government, after making various contingency provisions, public policy mandate of the RBI, including financial stability considerations. (Express Photo by Pradip Das)

The government expects Rs 1,06,041.56 crore as dividend and surplus from the Reserve Bank of India, nationalised banks and financial institutions in 2019-20 — the highest ever. For the last financial year, the government had budgeted receipt of Rs 54,817.25 crore as dividend and surplus but the revised estimate pegged the amount at Rs 74,140.37 crore. The amount budgeted for 2019-20 is over 40 per cent higher than the revised estimate for 2018-19.

Finance Secretary Subhash Chandra Garg said that the government expects Rs 90,000 crore as dividend from the RBI in the current fiscal. This is 32 per cent jump from the previous fiscal, when the central bank paid Rs 68,000 crore to the government including Rs 28,000 crore as interim dividend.

Union Budget 2019 Highlights: From startups to Space programme

As per Section 47 of the RBI Act, profits of the RBI are to be transferred to the government, after making various contingency provisions, public policy mandate of the RBI, including financial stability considerations.

For the year ending June 2018, RBI had total reserves of Rs 9.59 lakh crore, comprising mainly currency and gold revaluation account (Rs 6.91 lakh crore) and contingency fund (Rs 2.32 lakh crore). Many economists and expert panels have in the past argued that the RBI is holding much higher capital that required to cover all its risks and contingencies.

Subscriber Only Stories
UPSC Key- December 2, 2022: Why you should read ‘UN Security Council’ or ...Premium
Poet, playwright and linguist…how Savarkar impacted MarathiPremium
Wanted: New York City rat czar. Will offer salary as high as $170,000Premium
‘AAP a one-man party… cannot become BJP alternative,’ says Baijayan...Premium

Also Read: Here’s how India Inc reacted to Budget 2019

The Committee on recommending the appropriate economic capital framework for the Reserve Bank of India (RBI) is divided over the issue of transferring past reserves including unrealised gains in gold and currency revaluation accounts. Sources said the most committee members are in favour of reducing the RBI’s excess reserves in phased manner, without any substantial transfer to the government.

The majority view in the committee is that the past reserves of the RBI, especially unrealised gains, in gold and currency revaluation accounts, should not be touched while future transfers should be guided by the new policy.

Advertisement

These are key areas of differences between the government nominee on the panel, Finance Secretary Subhash Chandra Garg, and other members, sources said. The panel headed by former RBI Governor Bimal Jalan, which met Monday, sought more time to finalise its report owing to the differences on issues. Set up last December, the panel was expected to submit its report by April (within 90 days of its first meeting), but it is now likely in July.

First published on: 06-07-2019 at 02:01:29 am
Next Story

Haryana farmers defy govt restriction, sow banned HT Bt cotton in Hisar

Latest Comment
Post Comment
Read Comments
Advertisement
Advertisement
Advertisement
Advertisement
close