The government is likely to seek interim dividend of about Rs 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.
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 Rs 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 Rs 28,000 crore as interim dividend. In 2017-18, the government received Rs 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 Rs 1,76,051 crore, comprising Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).
Out of the net income of Rs 1,23,414 crore for the year 2018-19, RBI had already transferred Rs 28,000 crore to the government as interim dividend in March 2019.
The government got a higher dividend of Rs 95,414 crore during the current fiscal as against the budgetary estimate of Rs 90,000 crore.
As far as gross borrowing is concerned, Budget 2019-20 pegged it at Rs 7.10 lakh crore for the current fiscal, significantly higher than the Rs 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 Rs 1.45 lakh crore.