NEW DELHI: The government may seek an interim dividend of about Rs 30,000 crore from the RBI towards the end of the financial year to meet its fiscal deficit target of 3.3 per cent of GDP for 2019-20, sources said.
Government finances have come under pressure due to moderation in revenue collection and a slew of measures taken to lift growth from a six-year low of 5 per cent in the first quarter of the current fiscal. "If required, the government may request the Reserve Bank of India for an interim dividend of Rs 25,000-30,000 crore during the current fiscal," an official said. The official added that assessment in this regard would be made in early January.
Apart from the RBI dividend, there are other means of bridging any shortfall, including a mop-up from disinvestment and higher utilisation of National Small Saving Fund (NSSF), sources added. In the past, the government has taken the route of seeking interim dividend from the RBI to balance its account. Last fiscal, the RBI paid Rs 28,000 crore as interim dividend. During 2017-18, the government received Rs 10,000 crore as interim dividend from the central bank.
Last month, Governor Shaktikanta Das-led RBI central board gave its nod for transferring to the government a sum of Rs 1,76,051 crore, comprising Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).
Out of the net income of Rs 1,23,414 crore for the year 2018-19, RBI had already transferred Rs 28,000 crore to the government as interim dividend in March 2019. The government got a higher dividend of Rs 95,414 crore during the current fiscal as against the budgetary estimate of Rs 90,000 crore.
As far as gross borrowing is concerned, Budget 2019-20 pegged it at Rs 7.10 lakh crore for the current fiscal, significantly higher than the Rs 5.35 lakh crore borrowing programme for the financial year 2018-19. Gross borrowings of the government during the first half of the financial year 2019-20 will stand at Rs 4.42 lakh crore, which works out to 62.3 per cent of the total target for the entire year.
To pull the economy out of a six-year low growth and a 45-year high unemployment rate by reviving private investments, the government has taken a slew of measures, including a cut in corporate tax rate by almost 10 percentage points having a tax implication of Rs 1.45 lakh crore.
As part of the exercise, the government also withdrew the enhanced surcharge on long- and short-term capital gains for foreign portfolio investors as well as domestic portfolio investors with revenue implication of Rs 1,400 crore.
Even with regard to the Goods and Services Tax (GST), the all-powerful GST Council approved reduction in many items with impact on the exchequer.