The Government of India is planning to take money from Reserve Bank again. The central government may seek an interim dividend from the Reserve Bank of India. According to sources, the government says that there has been a big decline in revenue collection, due to which the government is not able to meet its expenditure commitments. For this reason, the government can once again seek financial help from the Reserve Bank.
Even before this, the government has taken Rs 1.76 lakh crore from the Reserve Bank last year.
The Reserve Bank mainly earns from the business of currencies and government bonds. The Reserve Bank keeps a part of these earnings for its operational expenses and contingency needs, while the remaining amount is given to the Center in the form of dividends.
In the last financial year, the Reserve Bank earned an additional Rs 1.23 lakh crore, which was higher than the previous years.
An official source revealed that this year has been very crisis from the economic point of view. The economic growth rate is also at its lowest level in the last 11 years, due to which the estimate of 5% GDP has also been revealed. Therefore, the Reserve Bank should consider the government’s demand for an interim dividend to be paid this year. The government wants that the amount received in dividends should be increased further.
However, so far no official statement has come from the Center and the Reserve Bank. The budget can be presented on the 1st of February. Finance Minister Nirmala Sitharaman may announce a huge incentive on infrastructure to boost the economy. In this way, the government will want to increase consumer demand and investment with the new budget.
The government is worried about the economic slowdown as the manufacturing sector is projected to grow by only 2%. Which increased by 6.9 percent last year. If the news is to be believed, the government has told the Reserve Bank officials that revenue collection maybe 34 to 37 percent less than the current budget estimate, but it is being decided to bring it down to about 25%.
Web Title: Govt of India can take financial help from the Reserve Bank again.
Featured Image: PM Narendra Modi & RBI Logo (Pic: Newslaundry)
News Source: Business Standard