The Reserve Bank of India (RBI) has approved a dividend payment of ₹30,307 crore to the Centre for the fiscal year ended March 2022. In the 2022 budget, the government had estimated that it would receive ₹73,948 crore as dividend from the RBI and state-run banks for FY22, which would be transferred this fiscal.
Assuming that the government would receive an additional ₹10,000 crore as dividend from state-run banks, this would still fall short of the budgeted amount by about ₹30,000 crore.
The bank’s central board of directors also decided to maintain the contingency risk buffer (CRB) at 5.50%. CRB, which comes from the contingency fund, is risk provisioning made from economic capital to cover monetary, credit, fiscal stability, and operational risks.
The budgeted dividend is 27% lower than the ₹1.01 trillion the Centre received in FY22. Of this, the RBI had contributed a massive ₹99,122 crore.
The government’s net tax revenues are likely to surpass the budget estimates by ₹1.4 trillion even if the excise duty on fuels is reduced. At the same time, food and fertilizer subsidies will considerably exceed the budgeted level.
The ₹30,307 crore transferred as surplus is for a full financial year. In 2020, the RBI had moved from a July-June accounting year to April-March to align its fiscal year with that of the government. The central bank pays dividends to the government every year from the surplus it generates from market operations, investments and printing of currency.