Government Estimated to Secure Dividend of Rs.1.02 Lakh Crore from RBI

On Feb 1, the government projected a dividend income of Rs 1.02 lakh crore from the RBI and public sector financial institutions for the coming fiscal year. The government expects to earn a higher dividend of Rs 1.04 lakh crore in the current fiscal year than the Budget Estimate of Rs 48,000 crore.

The current fiscal year estimate exceeded the budget estimate because the RBI paid a dividend of Rs 87,416 crore in May last year. In the previous fiscal year, the government raised Rs 39,961 crore from the RBI and public sector financial institutions.

Meanwhile, the government expects Rs 43,000 crore in dividend payments from Central Public Sector Enterprises (CPSEs). Other investments increased to Rs 50,000 crore in the current fiscal.

Overall, the government expected to collect Rs 1,54,407 crore in dividends from the RBI, public sector banks, and CPSEs during the current fiscal year. For the following fiscal year, it is slightly lower at Rs 1.50 lakh crore from CPSEs, RBI, and banks.

A higher dividend from banks and financial institutions, in addition to improved tax mobilisation, would contribute to achieving a fiscal deficit glide path. The government's fiscal consolidation roadmap aims to reduce the fiscal deficit to less than 4.5 percent of GDP by 2025-26, down from 5.1 percent in 2024-25.

The government expected the fiscal deficit to fall to 5.4 percent in the fiscal year beginning April 1, 2024.