The Govt can apply for NOK 30,000 intermediate dividend from RBI

The government can seek an intermediate dividend of around Rs 30,000 crore from the RBI towards the end of the fiscal year to meet the fiscal deficit target of 3.3 percent of GDP for 2019-20, sources said.

Public finances have come under pressure due to moderation in revenue collection and a number of measures taken to lift growth from a six-year low of 5 per cent in the first quarter of current fiscal policy.

"If necessary, the government may request the Reserve Bank of India for a temporary dividend of Rs 25,000-30,000 crore under the current fiscal policy," said an official.

The assessment in this regard would be made in early January, the official added.

Apart from the RBI yield, there are other ways to bridge any shortcomings, including mop from disinvestment and higher utilization of the National Small Saving Fund (NSSF), sources added.

Recently, the government has taken the route of seeking temporary dividends from the RBI to balance that account. Last fiscal policy paid RBI 28,000 crore as temporary dividend.

During 201[ads1]7-18, the government received Rs 10,000 crore as a temporary dividend from the central bank.

Last month, Governor Shaktikanta Das-led RBI central government nodded to transfer to the government a sum of Rs 1,76,051 crore, which includes surplus of 1.23,414 crore for the year 2018-19 and Rs 52,637 crore with surplus Provisions identified in accordance with the revised ECF.

Out of the net income of 1.23,414 crore for the year 2018-19, the RBI had already transferred Rs 28,000 crore to the government as a temporary dividend in March 2019.

The government received a higher dividend of Rs 95,414 crore under the current fiscal policy against the budget estimate of 90,000 crore.

In terms of gross borrowing, the 2019-20 budget fixed it at Rs 7.10 lakh crore for the current fiscal policy, significantly higher than the Rs 5.35 lakh crore loan program for the financial year 2018-19.

Gross government borrowing during the first half of fiscal year 2019-20 will be Rs 4.42 lakh crore, which represents 62.3 per cent of the total target for the whole year. [19659002] To pull the economy out of a six year low growth and a 45 year high unemployment rate by reviving private investment, the government has taken a number of measures, including cuts in the corporate tax rate by almost 10 percentage points with tax implications of Rs 1.45 lakh crore.

As part of the exercise, the government also deducted the increased surcharge on long-term and short-term capital gains for foreign portfolio investors as well as domestic portfolio investors with revenue implications of Rs 1,400 crore.

Even with regard to the goods and services tax (GST), the powerful GST Council approved reductions in many elements with impact on the tax.

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