Amidst speculations that RBI would pay interim dividend of 30000 crore to Government, RBI governor said that he is not aware of any demand of interim dividend by the government.
While addressing a media conference, Shaktikanta Das, Governor of RBI, confirmed, “I have seen it only in media. I have received no such demand from the government for interim dividend”.
Reports suggested that Government may Demand RBI to Pay Interim Dividend of 30000 crore
Various media reports, suggested that the government may demand RBI to pay interim dividend of about 30000 crores. This move by government is to meet its fiscal deficit target of 3.3% for 2019-20.
CARE ratings suggested that the government may have to look for more revenues from disinvestment. RBI would support the resource mobilisation by paying interim dividend.
To Compensate for Corporate Tax Cuts
As the centre cut down corporate taxes to boost a six-year low economy of 5% in the first quarter of this financial year, the reports claimed that it would impact the stressed revenue of the government and it may turn to RBI for funds.
While announcing the cut off in corporate tax rates, Finance minister said that the government is conscious of its impact on fiscal deficit.
Other Sources to Assist the Government
RBI Governor suggested that there are other sources to fund the government so that it could meet its target, he said, “The government has made a statement that they will adhere to the fiscal deficit target. Therefore, we have no reason to doubt the commitment to maintain the numbers as given in the budget. So whatever short fall is expected because of corporate tax rate cuts, the government has the option of increasing or making it up from other sources”.
Other means of mending up the shortfall could be mop up from disinvestments and higher utilisation of National Small Saving Funds (NSSF).
RBI payed Government Earlier this Year
RBI has payed Rs 1.76 lakh crore to the NDA government in August 2019. It included dividend of Rs 1.23 lakh crore and surfeit of Rs 52,640 crore. Last year the RBI paid an interim dividend of Rs.28,000 crore to the government.
The government has fixed its gross borrowing at Rs 7.10 lakh for this financial year which was Rs.5.35 lakh crore in 2018-19.