‘Exploring ways for higher surplus from RBI’

The government is in discussions with the Reserve Bank of India to see if there is scope to increase the amount of surplus transferred to the government for 2016-17 (Jul-Jun), Economic Affairs Secretary Subhash Garg Thursday said. "We are discussing with the RBI whether there is scope for more transfer as we have our budget estimate of 580 bln rupees," Garg told reporters. "RBI had calculated surplus of 440 bln rupees. The RBI has transferred 300 bln rupees to the government." For the year 2016-17, the central bank transferred a surplus of 306.59 bln rupees, an amount that is less than half of the 658.76-bln-rupee sum that it transferred a year ago.

Separately, in an interview to a television channel, Garg said this 54% decline in surplus transfer was "not substantial", adding that other factors besides demonetisation have impacted the RBI surplus. According to the accounts of the RBI, published on Wednesday, the surplus dropped mainly because of a sharp decline in its interest income, and a rise in expenditure on printing of currency notes after demonetisation. Another factor that ate into the central bank's surplus was the transfer of 131.4 bln rupees to its Contingency Fund, which represents the amount set aside for meeting unexpected and unforeseen contingencies. In 201516, the RBI did not transfer any amount to the contingency fund. About demonetisation, Garg said the RBI data shows that the government has been successful in curbing fake currency notes through the exercise. However, the RBI's annual report showed that in 201617 (Apr-Mar), the number of pieces of counterfeit currency detected in the banking system was 762,072, only 20% higher than last year.

The central bank transferred a surplus of 306.59 bln rupees, an amount that is less than half of the 658.76bln-rupee sum that it transferred a year ago