RBI approves ₹30,307 cr FY22 dividend to Centre
Gopika Gopakumar
MUMBAI: The Reserve Bank of India (RBI) on Friday approved a dividend payment of ₹30,307 crore to the Centre for the fiscal year ended March 2022, sharply lower than the government’s expectations.
The bank’s central board of directors also decided to maintain the contingency risk buffer (CRB) at 5.50%. CRB, which comes from the contingency fund, is risk provisioning made from economic capital to cover monetary, credit, fiscal stability, and operational risks.
In the 2022 budget, the government had estimated that it would receive ₹73,948 crore as dividend from the RBI and staterun lenders for FY22, which would be transferred this fiscal.
The budgeted dividend is 27% lower than the ₹1.01 lakh crore the Centre received in FY22. Of this, the RBI had contributed ₹99,122 crore. Assuming that the government would receive an additional ₹10,000 crore as dividend from state-run banks, this would still fall short of the budgeted amount by ₹30,000 crore.
“The spillover of the Life Insurance Corporation of India’s initial public offering would absorb a large part of the lowerthan-estimated surplus transfer from the RBI to the central government. In addition, the government’s net tax revenues are likely to surpass the budget estimates by ₹1.4 lakh crore even if the excise duty on fuels is reduced. At the same time, food and fertilizer subsidies will considerably exceed the budgeted level. All in all, we expect the fiscal deficit to come in at 6.3% of GDP in FY23,” said Aditi Nayar, chief economist at ICRA Ltd. The government had set a fiscal deficit target of 6.9% for FY22.
The ₹30,307 crore transferred as surplus is for a full fiscal year. In 2020, the RBI had moved from a July-june accounting year to April-march to align its fiscal year with the government. The RBI pays dividends to the Centre from the surplus generated from market operations, investments and printing of currency.