Business Companies 20 Dec 2018 Centre to seek inter ...

Centre to seek interim dividend from RBI as funds get dried up

AGENCIES
Published Dec 20, 2018, 5:21 am IST
Updated Dec 20, 2018, 5:21 am IST
The government and the RBI have been locked in a tussle over various issues, including transfer of RBI’s excess reserves.
Reserve Bank of India (RBI)
 Reserve Bank of India (RBI)

New Delhi: The government will seek interim dividend from the Reserve Bank of India (RBI), economic affairs secretary Subhash Chandra Garg said on Wednesday.

Last fiscal, the RBI paid an interim dividend of Rs 10,000 crore to the Centre. RBI follows the July-June calender.

 

Asked if the government will seek interim dividend from RBI this year, he said, “Yes.”

The secretary also said the committee which will examine the economic capital framework of the Reserve Bank has almost been finalised.

“Panel on economic capital framework has virtually been agreed. Hopefully, soon it will be anno-unced,” he said at the sidelines of an event organised by PHD Chamber.

India was set to miss its fiscal deficit target for the year ending March 2019 due to a shortfall in revenues and lower-than-targeted disinvestment proceeds, India Ratings and Research said.

Despite the reforms helping plug leakages in GST collections, India Ratings said aggregate indirect tax collections grew only 4.3 per cent in the first half of the year compared with a targeted growth of 22.2 per cent for the full year.

The non-tax revenue is also expected to be lower by Rs16,200 crore than the budget estimate of Rs 2.45 lakh crore, it said, attributing this to lower dividends from state-run enterprises and RBI, lower receipts from communication services and lower divestments.

On November 19, the RBI board had decided to constitute an external committee to examine its economic capital framework. The composition and terms of reference of the committee were to be decided jointly by the government and the RBI.

The government and the RBI have been locked in a tussle over various issues, including transfer of RBI’s excess reserves.

Finance Minister Arun Jaitley had earlier said the government does not need any extra funds from the Reserve Bank or any other institution to meet the fiscal deficit target.

Mr Garg too had earlier tweeted that there is no proposal to ask the RBI to transfer excess reserves and the only issue under discussion “is to fix economic capital”.

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