Nearly a month after the Reserve Bank of India announced its intention to transfer Rs 1.76 trillion to the central government, a new report has emerged claiming that the Narendra Modi government may request an interim dividend of around Rs 30,000 crore from the federal bank.
This, according to a report by news agency PTI, will be to ensure that the Modi government meets its fiscal deficit target. A report by the news agency published on NDTV website said that the government may seek the dividend payment towards the end of the April-March financial year to meet the government’s fiscal deficit target of 3.3 percent of gross domestic product (GDP).
This comes after the Reserve Bank of India last month announced that it had decided to transfer Rs 1.76 lakh crore to the central government. “The Central Board of the Reserve Bank of India (RBI) today decided to transfer a sum of Rs. 1,76,051 crore to the Government of India (Government) comprising of Rs. 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) adopted at the meeting of the Central Board today,” a statement by the RBI had said.
The news had evoked angry reactions on social media where many likened the development to India turning into a ‘Banana Republic.’
The fear over the Modi government possibly failing to meet its fiscal target in the current financial year gained momentum after the first quarter of 2019-20 financial reported a growth rate of just 5%.