RBI to Give Rs 28,000 Crore to Govt As Interim Dividend

This is the second successive year that the RBI will be transferring an interim surplus.

The RBI on Monday said it will give Rs 28,000 crore to the government as interim dividend.  

(Photo Courtesy: Twitter/ @arunjaitley)

The Reserve Bank of India (RBI) on Monday said it will give Rs 28,000 crore to the government as interim dividend.

The decision was taken at the meeting of the RBI's Central Board in New Delhi.

"Based on a limited audit review and after applying the extant economic capital framework, the Board decided to transfer an interim surplus of Rs 280 billion to the central government for the half-year ended 31 December 2018," the central bank said in a statement.

This is the second successive year that the Reserve Bank will be transferring an interim surplus.

Last financial year, the RBI had paid an interim dividend of Rs 10,000 crore to the Centre.

Earlier, Finance Minister Arun Jaitley addressed the post-Budget meeting of the Central Board. Jaitley in his address broadly outlined the various reforms and policy measures taken by the government over the last four years and the effects thereof.

Govt Projects 3.4 % of GDP as Fiscal Deficit Projection

The customary post-Budget meeting took place against the backdrop of a slight deviation from the fiscal deficit target for the current financial year, tax rebate for income up to Rs 5 lakh and income support scheme for 12 crore farmers.

The government announced the 'Pradhan Mantri Kisan Samman Nidhi' (PM-KISAN) in the budget under which Rs 6,000 per year would be provided to farmers holding cultivable land of up to 2 hectares.

The government also decided to increase standard deduction from Rs 40,000 to Rs 50,000 and raised the TDS threshold on interest earned on bank/post office deposits from Rs 10,000 to Rs 40,000.

In the Interim Budget, the government has projected a fiscal deficit of 3.4 percent of the GDP for 2019-20, against the earlier target of 3.3 percent.

The Centre also came out with a roadmap to reduce the fiscal deficit – the gap between total expenditure and revenue – to 3 percent of the gross domestic product (GDP) by 2020-21, and eliminate primary deficit.

Primary deficit refers to the deficit left after subtracting interest payments from the fiscal deficit.