THE GOVERNMENT says it isn’t seeking the RBI’s surplus capital to fund fiscal deficit. Point accepted. A bulk of the ` 10 lakh crore reserves in the RBI books are actually revaluation reserves in gold and currency reserves. These have to be sold to be actually realised – something that is not advisable. So exactly what will the six-member committee headed by former RBI Governor Bimal Jalan deliberate?
The crux of the matter is the contingency reserves of over ` 2.3 lakh crore. The government feels that contingency reserves are far higher than the RBI might ever require. Battle lines were drawn when the RBI transferred some
` 10,000 crore to the contingency fund in 2016/17. With this committee, the government is hoping to settle the matter, get more annual surpluses without any transfer to contingency fund, and get hold of the surplus contingency fund. Over to Jalan.