The Reserve Bank of India (RBI) approved Rs. 1.76 lakh crore payout to the government on the recommendation of an expert committee chaired by former Governor Bimal Jalan which is seen as a move to help stimulate low economic growth.
The RBI’s board transfer includes Rs 1.23 lakh crore as dividend and Rs 52,640 crore from its surplus capital. The dividend payment includes Rs 28,000 crore which is already been transferred to the government in February.
The transfer comes at a time when India is facing a five-year low economic growth, depressed consumer spending and reports of huge job losses in the auto industry.
To curtail that Finance Minister Nirmala Sitharaman last week announced various steps including rushing capital infusion of Rs 70,000 crore in state-run lenders even as she strives to meet a narrower fiscal gap goal of 3.3 per cent of GDP. It was earlier announced in the Budget to spread it over the year ending March 2020. She also announced the withdrawal of higher taxes on foreign portfolio investors and surcharge on long and short term capital gains.
The RBI pays dividends to the government every year, based on the profits from its investments and printing of currency. It will release its balance sheet as part of its annual report later this week.
According to Reuters, economic growth is expected to have slowed 5.7 per cent in June quarter, the lowest in five years.
According to Reuters, economic growth is expected to have slowed to a more than five-year low of 5.7 per cent in the June quarter. The RBI and several economists have lowered the growth projections for the economy.