Govt to seek ₹30,000 crore interim dividend from Reserve Bank

Government finances have come under pressure due to moderation in revenue collection and a number of measures taken to lift growth from a six-year low of 5 per cent in the first quarter of the current fiscal.

The government is likely to seek interim dividend of about ₹30,000 crore from the Reserve Bank of India (RBI) towards the end of the financial year to meet its fiscal deficit target of 3.3 per cent of GDP for 2019-20, according to news agency PTI.

Earlier too, the government has taken the route of seeking interim dividend from the RBI to balance its account. (FILE PHOTO.)

Government finances have come under pressure due to moderation in revenue collection and a number of measures taken to lift growth from a six-year low of 5 per cent in the first quarter of the current fiscal.

“If required, the government may request the Reserve Bank of India for interim dividend of ₹25,000-30,000 crore during the current fiscal,” an official said.

The assessment would be made in early January, the official added.

Apart from the RBI dividend, there are other ways of fixing any shortfall, including mop up from disinvestment and higher utilisation of National Small Savings Fund (NSSF), sources added.

Earlier too, the government has taken the route of seeking interim dividend from the RBI to balance its account. Last financial year, the RBI paid ₹28,000 crore as interim dividend. In 2017-18, the government received ₹10,000 crore as interim dividend from the central bank.

Last month, the RBI’s central board gave its nod for transferring to the government a sum of ₹1,76,051 crore, comprising ₹1,23,414 crore of surplus for the year 2018-19 and ₹52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).

Out of the net income of ₹1,23,414 crore for the year 2018-19, RBI had already transferred ₹28,000 crore to the government as interim dividend in March 2019.

The government got a higher dividend of ₹95,414 crore during the current fiscal as against the budgetary estimate of ₹90,000 crore.

As far as gross borrowing is concerned, Budget 2019-20 pegged it at ₹7.10 lakh crore for the current fiscal, significantly higher than the ₹5.35 lakh crore borrowing programme for financial year 2018-19.

To help the economy recover from a six-year low growth and a 45-year high unemployment rate by reviving private investments, the government has taken a number of steps, including a cut in corporate tax rate by almost 10 percentage points having tax implication of ₹1.45 lakh crore.

(With inputs from agencies).