No proposal to RBI seeking transfer of Rs 3.6 lakh crore, says govt

Subhash Chandra Garg said there was "misinformed speculation" in the media, and that the government's fiscal math was "completely on track".

By: Express Web Desk | New Delhi | Updated: November 9, 2018 2:22:04 pm
Govt responds: No proposal to ask RBI to transfer 3.6 lakh crore Union Finance Minister Arun Jaitley with Economic Affairs Secretary Subhash Chandra Garg (Express Photo/File)

Economic Affairs Secretary Subhash Chandra Garg Friday said there was no proposal from the Finance Ministry to the Reserve Bank of India to transfer a surplus of Rs 3.6 lakh crore to the government. Garg said there was “misinformed speculation” in the media, and that the government’s fiscal math was “completely on track”.

“Lot of misinformed speculation is going around in media. Government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer Rs 3.6 or 1 lakh crore, as speculated,” Garg said, adding that the only proposal being discussed by the government and central bank pertained to fixing an appropriate economic capital framework of the RBI.

On Monday, The Indian Express had reported that at the heart of the standoff between the government and RBI was a proposal by the Finance Ministry seeking to transfer a surplus of Rs 3.6 lakh crore, which is over one-third of the total Rs 9.59 lakh crore reserves of the central bank, to the government. The RBI did not accept the proposal, sources said.

The report had added that the government is of the view that the central bank has over-estimated its capital reserves requirements resulting in excess capital of Rs 3.6 lakh crore. Sources said the government has proposed that the use of these funds be decided in consultation with the RBI.

Express Explained: How RBI surplus transfers work

Garg Friday added, “Government’s FD in FY 2013-14 was 5.1%. From 2014-15 onwards, Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with FD of 3.3%. Government has actually foregone 70000 crore of budgeted market borrowing this year.”

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