Sur­plus Cap­i­tal

Business Today - - THE BUZZ - - Anand Ad­hikari

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.

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