RBI governor, Shaktikanta DasImage: Amit Verma
Based on the recommendations of the Bimal Jalan committee, the government will receive a ‘gift’ of ₹1.76 lakh crore from the Reserve Bank of India (RBI). Former RBI governors Raghuran Rajan and Urjit Patel feel this would compromise the central bank’s ratings and increase its borrowing cost. The RBI transfers surplus each year, but it is from that year’s profit. This time, it is the accumulated reserve.
The latest surplus reserve comprises ₹123,414 crore for 2018-19 and ₹52,637 crore of excess provisions. This is over 250 percent above the ₹50,000 crore transferred in two tranches last year.
"The RBI’s surplus money is fungible. Though ₹1.76 lakh crore appears to be large, only ₹58,000 crore is the surplus,” says Soumyajit Niyogi, associate director, India Ratings and Research.
HDFC Securities’ research analyst Himanshu Parmar says, “At a time when the economy is gripped by a fear of slowdown, such a transfer will provide some relief to the government. At the same time it seems unlikely that the amount would be used only to support fiscal stimulus measures.”