RBI cuts dividend to government by half to Rs 30,659 crore
DSIJ Intelligence / 11 Aug 2017
The Reserve Bank of India (RBI) has halved its yearly dividend transfer to the government at Rs 30,659 crore for FY17. This may imbalance the government’s fiscal math for the current year.
The Reserve Bank of India (RBI) has halved its yearly dividend transfer to the government at Rs 30,659 crore for FY17. This may imbalance the government’s fiscal math for the current year.
In FY16, the RBI transferred about Rs 65,876 crore. This was just Rs 20 crore less than the earlier year’s dividend transfer of Rs 65,896 crore. Over the past two years, the RBI transferred the entire surplus generated to the government via the dividend.
The government had budgeted to earn about Rs 58,000 crore as dividend from the RBI. But the lower payout may force the central government to borrow more from the market, widening the fiscal deficit for FY18. The RBI has not provided a reason for the lower dividend transfer.
In FY17, RBI’s finances were impacted by the government’s decision to demonetise old Rs 500 and Rs 1,000 notes on November 8, 2016, which led to a withdrawal of 86% of the currency in circulation. The RBI follows a July-June financial year.
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