The Reserve Bank of India on Wednesday approved a dividend of a whopping Rs 2.11 lakh crore. This is the highest ever dividend payout by the central back and it marks 140% increase from FY23. As per Bloomberg, the pay is expected to help the government in its budget deficit target.
"The Board...approved the transfer of Rs 2,10,874 crore as surplus to the Central Government for the accounting year 2023-24," RBI said in a statement.
This will assist the government in meeting its fiscal deficit target of 5.1% of GDP for the current financial year. It would also bolster revenues for any new administration following the general elections next month, providing greater flexibility for public spending.
Teresa John, an economist with Nirmal Bang Institutional Equities told Bloomberg, that a substantial surplus transfer would help the government address any shortfall in disinvestment receipts and fund welfare plans post-elections.
The decision was taken at the 608th meeting of the Central Board of Directors of the Reserve Bank of India held under the chairmanship of Governor Shaktikanta Das.
The dividend payout was Rs 87,416 crore for 2022-23.
"With the revival in economic growth in FY 2022-23, the Contingent Risk Buffer (CRB) was increased to 6.00 per cent. As the economy remains robust and resilient, the Board has decided to increase the CRB to 6.50 per cent for FY 2023-24," the RBI said
Government dividend receipts for any fiscal includes interim dividends announced by state-owned companies during the fiscal, and final dividends for the previous fiscal. From the CPSEs, the government has obtained Rs 4,837.25 crore as dividends from the current financial year which also includes Rs 3,443 crore as a special dividend from Telecommunications Consultants India Limited, a public sector enterprise under the Ministry of Telecom.
[With PTI inputs]
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