The Reserve Bank of India is likely to announce a major interim dividend to the Central government following a change in guard at the country’s apex bank. According to sources, the RBI is thinking to give a mammoth dividend of INR 30,000 to 40,000 crore to the central government by the end of March 2019.
The central government from a long time demands some monetary gain from the RBI and it seems that their wait is near to a positive end. This dividend if paid on time can boost the financial capacity of the central government and help to reduce the widening fiscal deficit, it is witnessing following the sharp decline in tax collections last year.
Many experts believe that this move by the RBI will help the central government to a large extent as the dividend is likely to disburse in March this year, just before the national elections due in May 2019.
“These additional funds will give strength to meet the fiscal deficit target of 3.3 percent of the GDP for the financial year ending in March this year as the government’s revenue falling short by 1 trillion rupees,” said sources from the Finance Ministry. Following a clash with the government last month over dividend pay-out and other issues, Urjit Patel, had resigned from the post of its Governor. Shaktikanta Das, a former finance ministry official was appointed as the new Governor of RBI. The new chief in coordination with the government has appointed one panel that is looking after sharing the RBI’s reserves in an efficient and lawful manner.
“We are sure that an interim dividend of 30,000 crore Indian rupees will be paid by March this year,” one of the source told to the news agency.
The RBI did not reply to a mail seeking comment on this issue. The finance ministry also avoided to comment. However, in an address to media on Monday, the new Governor has said the bank will formally announce the decision on interim dividend in coming times.
The RBI officials will once again hold a meeting and take a final call on the dividend by the time finance minister presents a budget on February 1, 2019, sources said.