The Reserve Bank of India on Monday announced an interim dividend of Rs 28,000 crore to the government after its post-budget meeting with the Finance Ministry. The total surplus transfer to the government for 2018-19 now stands at Rs 68,000 crore.
Earlier, addressing the media after the meeting Jaitley along with RBI governor Shaktikanta Das said that no specific decision on the interim dividend had been taken. Das explained that the decision on the disbursal of the interim dividend would be taken by the RBI board, and not by the RBI central board. The meeting was addressed by Jaitley where he highlighted the key points of the budget including a range of topics.
The government has already received Rs 40,000 crore from the central bank during the financial year 2018-19, Economic Affairs Secretary Subhash Chandra Garg told reporters earlier this month. This is the first meet after the interim budget 2019-20 was announced on February 1.
The RBI board arrived at the final interim dividend number based on the central bank's audited earning of first six months as it follows a July-June financial year calendar. The first half was over in December 2018.
The RBI had made a dividend payout of Rs 30,659 crore for the fiscal year ending June 2017, about 63 per cent higher than the previous year (2016-17).
The interim dividend will help government ease fiscal pressure and also aid it in giving the economy a boost before the crucial general elections in April-May this year. The government has projected the fiscal deficit target at 3.4 per cent for the financial 2019-20 in the interim budget (2019-20).
The government and RBI have been at loggerheads over the transfer of central bank's excess reserves which it believes are much higher than what the RBI needs at the time of financial exigencies the country may face. However, a committee headed by former RBI Governor Bimal Jalan is reviewing the rules governing surplus transfers.
(Edited by Manali)