RBI dividend to government reduces by half to Rs 30,569 crore
Economists believe the demonetisation drive increased the apex bank’s expenses.
The Reserve Bank of India will pay Rs 30,569 crore as dividend to the government for the financial year 2016-17, less than half of Rs 65,876 crore it had paid last year, reported the Economic Times. While the central bank has not provided any specific reason for the drop, economists believe a ban on currency notes of Rs 500 and Rs 1,000 increased the RBI’s expenses.
The decline means the government could have a hard time meeting its fiscal deficit target of 3.2% for the year ending in March, reported Reuters. It is expected that New Delhi will boost revenues from other areas to meet the shortfall.
The dividend amount is the lowest since 2011-12, according to the Business Standard. The RBI had transferred Rs 16,010 crore of its surplus to the government in that financial year.
The apex bank is expected to publish its annual reports next week. The government had accounted for a dividend of Rs 74,901 crore from the RBI and other financial institutions in the Union Budget for 2017-18. However, an official had later said that the RBI’s share had been reduced to Rs 58,000 crore.