Published: Sat, August 12, 2017
Business | By Max Garcia

RBI to transfer Rs 30659 crore surplus to government

RBI to transfer Rs 30659 crore surplus to government

For the 12 months ended June 30, 2017, the RBI will transfer a surplus of Rs. 30,659 crore to the Government of India, sharply lower than the previous year's Rs. 65,876 crore. RBI transferred about 80% of its income as surplus in the previous three years.

The Reserve Bank's income comprises of earnings from foreign and domestic sources, with the major portion being contributed by interest receipts, complemented by relatively small amounts of income from discount, exchange, commission, etc. Chidambaram further asked RBI if it will reveal breakdown of the Rs 50,000 crore loss/expenditure.

The RBI, however, has not provided a reason for the lower dividend transfer.

Given RBI's figures, it has become evident that other public banks will fare worse, thus giving rise to the grim prediction that fiscal deficit might increase from 3.2 per cent to 3.4 per cent this year.

Since 2012-13, following the YH Malegam Committee's recommendations, the RBI has been transferring its entire surplus to the government.

The central bank's statement assumes significance, as it comes days after the Congress party on August 8 alleged that two different kinds of Rs 500 and Rs 2,000 notes were printed post demonetisation, "jeopardising the credibility" of Indian currency. The value of scrapped notes was Rs 15.44 lakh crore, about 86 per cent of all currency. "Will RBI also tell us the cost of destroying old notes and the cost of printing new/replacement notes?" he said in another tweet.

However, he did not give total cost the Reserve Bank incurred on printing of new currency notes. "If other conditions remain unchanged, the fiscal deficit can increase to 3.4 per cent from 3.2 per cent a year ago", says Madan Sabnavis, Chief Economist at CARE Ratings (India).

"First quarter direct tax collections if continued in the fiscal will provide some buffer for central government deficit", he said.

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