Mumbai: The Reserve Bank of India (RBI) on Wednesday approved a record-breaking dividend payout of Rs 2.11 lakh crore to the central government for the fiscal year 2023-24, aiding in better fiscal deficit management.
In comparison, the surplus transfer by the RBI to the Centre was Rs 87,416 crore for 2022-23, with the previous high being Rs 1.76 lakh crore in 2018-19.
This decision was made during the 608th meeting of the Central Board of Directors of the RBI, chaired by Governor Shaktikanta Das.
“The Board…approved the transfer of Rs 2,10,874 crore as surplus to the Central Government for the accounting year 2023-24,” the RBI announced in a statement.
The central government aims to contain the fiscal deficit, the gap between expenditure and revenue, to Rs 17.34 lakh crore (5.1 percent of GDP) for the current financial year.
In the 2024-25 Budget, the government projected a dividend income of Rs 1.02 lakh crore from the RBI and public sector financial institutions.
The RBI board also reviewed the global and domestic economic scenario, assessing risks to the growth outlook. Additionally, it discussed the RBI’s performance during 2023-24 and approved its Annual Report and Financial Statements for the past fiscal year.
The RBI noted that during the accounting years 2018-19 to 2021-22, due to macroeconomic conditions and the COVID-19 pandemic, the Board maintained the Contingent Risk Buffer (CRB) at 5.50 percent of the RBI’s balance sheet size to support growth and overall economic activity.
“With the revival in economic growth in FY 2022-23, the CRB was increased to 6.00 percent. As the economy remains robust and resilient, the Board has decided to increase the CRB to 6.50 percent for FY 2023-24,” the RBI added.
The transferable surplus for 2023-24 was determined based on the Economic Capital Framework (ECF) adopted by the RBI in August 2019, following the recommendations of the Bimal Jalan-headed expert committee. The committee advised that the risk provisioning under the CRB be maintained within a range of 6.5 to 5.5 percent of the RBI’s balance sheet.
