The Centre may seek an interim dividend of about ₹30,000 crore from the Reserve Bank of India (RBI) towards the end of the financial year to meet its fiscal deficit target of 3.3% of GDP for 2019-20, sources said.
Government finances have come under pressure due to moderation in revenue collection and a slew of measures are being taken to lift growth from a six-year low of 5% in the first quarter of the current fiscal.
“If required, the government may request the Reserve Bank of India for interim dividend of ₹25,000-30,000 crore during the current fiscal,” an official said.
The assessment in this regard would be made in early January, the official added.
Apart from the RBI dividend, there are other means of bridging any shortfall, including 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 ₹28,000 crore as interim dividend.
During 2017-18, the government received ₹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 the government a sum of ₹1,76,051 crore, comprising ₹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 ₹1,23,414 crore for the year 2018-19, RBI had already transferred ₹28,000 crore to the government as interim dividend in March 2019.
As far as gross borrowing is concerned, Budget 2019-20 pegged it at ₹7.10 lakh crore for the current fiscal, significantly higher than the ₹5.35 lakh crore borrowing programme for financial year 2018-19.
Gross borrowings of the government during the first half of financial year 2019-20 will stand at ₹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 slew of measures, including cut in corporate tax rate by almost 10 percentage points having tax implication of ₹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 ₹1,400 crore.
