Budget 2024: Government may set dividend target for RBI, banks, financial institutions at Rs 70,000 crore

After receiving a bumper dividend from the Reserve Bank this fiscal, the government will look forward to receiving around Rs 70,000 crore from the central bank and financial institutions (FIs) in the next fiscal. In the interim budget to be unveiled by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1, the government will fix dividend income from financial institutions at much higher than expected for the current fiscal year, sources said 480 billion level.

The forecast for the current financial year has exceeded the budget target as the Reserve Bank of India paid a dividend of Rs 87,416 crore. As public sector banks and financial institutions posted good quarterly results during the current financial year, their dividend payments in the coming year will be higher than this year.

Therefore, the RBI and financial institutions are expected to pay dividends of around Rs 70,000 crore in FY25, sources said. The government expects dividends from the Reserve Bank of India (RBI), public sector banks and financial institutions to increase by 17% to Rs 48,000 crore in 2023-24.

However, the Reserve Bank transferred a surplus of Rs 87,416 crore to the central government for 2022-23, far exceeding this target. The Reserve Bank has transferred a surplus of Rs 87,416.22 crore to the central government during 2023-24, higher than the amount transferred last year (Rs 30,307.45 crore) and the amount budgeted under the RBI’s nationalization dividend/surplus transfer for 2023-24 Banks and Financial Institutions in the Union Budget (Rs. 48,000 crore).

In the last fiscal year, the government raised Rs 40,953 crore from the Reserve Bank of India and public sector financial institutions. In addition to higher tax mobilization, higher dividends from banks and financial institutions will help bring down the fiscal deficit.

As per the fiscal consolidation road map, the government aims to reduce the fiscal deficit to below 4.5% of GDP by 2025-26 from an estimated 5.9% of GDP in 2023-24. According to the roadmap, the government must reduce the fiscal deficit to 5.4% in the next fiscal year starting April 1, 2024.

(This story has not been edited by News18 staff and is published from associated news agency – PTI)