RBI TO TRANSFER ₹1 LAKH CRORE SURPLUS TO GOVT TO CUSHION COVID

NEW DELHI: The Reserve Bank of India’s (RBI) board approved a significantly higher than expected surplus transfer to the government on Friday but it may not be enough to cushion the damage from a crippling second wave of the Covid-19.

RBI announced a surplus transfer of ₹99,122 crore for the nine-month period from July 2020 to March 2021, the central bank said in a statement. The bank will move to an April to March accounting year from 2021-22, from a July to June year. RBI pays dividends to the government every year from surplus it generates from market operations, investments and printing of currency.

The higher-than-expected dividend or surplus transfer to the government comes as the government is expecting a sharp sequential fall in tax collections due to the severe second wave of Covid-19 which has forced lockdowns in several states.

The cash will help finance minister Nirmala Sitharaman keep budget deficit close to this year’s targeted 6.8% of GDP.