RBI’s higher payout to help govt tide over revenue losses from lockdowns: Analysts
After the RBI surprised the Centre with a record Rs 99,122 crore in surplus transfer for FY21, analysts said this will help the government tide over the revenue losses from lockdowns and extend more support to the pandemic hit industries and to the poor people. In fiscal 2020, the RBI had paid only Rs 57,128 crore in dividend to the government and the finance minister had budgeted only Rs 45,000 crore from the central bank.
The higher payout followed the Bimal Jalan panel report that had set a new economic framework capital buffer for the central bank along with the contingency risk buffer at 5.5 per cent.
So far, in response to the second wave of the pandemic, the government has set aside only Rs 26,000 crore for free food distribution to 80 crore people.
Barclays India chief economist Rahul Bajoria said the upside surprise increases the spending bandwidth of the fiscally stretched government, giving it more room to provide more reliefs to alleviate the impact of the second wave of the pandemic.
The dividend payout of Rs 99,122 is 0.5 per cent of GDP, more than double of the budget estimate of Rs 45,000 crore, and has been enabled by the increased returns from the RBI’s domestic assets and changes in its accounting practices — the RBI ..