Mumbai: The Reserve Bank of India (RBI) is expected to transfer a record Rs 2.8 billion to Rs 3.1 billion as a central government dividend for fiscal year 2024-2025, while Rs 2.1 billion paid in the previous year. Economists say that huge sales are more profitable, increased interest income from government bonds and increased foreign currency assets should contribute to increased dividend expenditures. The windfall will help the government manage the fiscal figures.
Madhavi Arora, chief economist at Emkay, said: “We expect the RBI dividend to be transferred about Rs 2.8 billion to Rs 3.1 billion, while the expected Rs 2.22 billion is Rs 2.1 billion. This could reduce the tax scope of the tax scope to the tax scope and could reduce the loss of taxes within the tax scope.
Madan Sabnavis, chief economist at Varodarda Bank, said: “This may be higher than last year’s spending, perhaps in the Rs 2 to 250 crore region, with the help of US dollar sales support, the Reserve Bank of India provides loans to banks in the form of a variable reverse buyback auction to raise funds and responsibilities to help RBI’s revenue.
The Reserve Bank of India is expected to announce its surplus funds to the government later this month.
Finance Minister Nirmala Sitharaman said in a coalition budget speech on February 1 that the government is expected to receive a dividend of Rs 2.56 crore from the Reserve Bank of India and the Public Sector Bank.
The central bank pays surpluses to the government every year, which are collected from income generated through investments, the valuation of its dollar reserves, and the printed currency. This payment is determined after consideration of provisions on non-performing loans, asset depreciation, employee benefits and other statutory expenses.
Compared with its Asian and global peers, central banks’ actions, especially their strategic dollar sales, play a crucial role in minimizing volatility in the Indian currency. From February to February 25, the Reserve Bank of India engaged in huge sales at a price of US$371.551 billion, while also purchasing US$322.685 billion. These businesses not only help defend the rupee dollar, but also hope to significantly increase the RBI revenue.
