Rs 2.1 lakh crore: RBI’s record dividend swells govt coffers
Reserve Bank of India (RBI) on Wednesday said it would pay a record dividend of `2.1 lakh crore for FY24 — more than double the amount the Centre had budgeted for — as Mint Road made windfall interest gains from its overseas investments.
The benchmark bond yield retreated below 7% on expectations that New Delhi would now need to borrow less this fiscal year.
“The higher dividend is welcome, of course,” finance secretary TV Somanathan told ET. “It exceeds our estimate by 0.2-0.3% of GDP.”
In the interim budget, North Block had factored in receipts of Rs 1.05 lakh crore under dividends and profits.
The record central bank surplus transfer would help push New Delhi’s resource envelope in FY25, allowing for either enhanced expenditures or a sharper fiscal consolidation than what was baked into the pre-polls budget passed in February, said Aditi Nayar, chief economist at rating agency Icra. “Increasing the funds available for capex would certainly boost the quality of the fiscal deficit,” she said, pointing to the need for the Centre to borrow less money
But a shorter time window after the formation of the new government might make it difficult to fully deploy the additional funds this fiscal year itself, Nayar added.
The probability of a narrower fiscal gap caused cheer in Mumbai's bond market. Yield on the 10-year benchmark government bond closed four basis points lower at 6.99%. One basis point is a hundredth of a percentage point. Bond prices and yields move inversely. Government bonds are the pricing
