RBI said in a statement that it would transfer surplus funds of Rs 99,122 crore to the central government. RBI gave the statement on Friday (May 13). These funds are for the tenure of the nine months that ended on March 31 (July 2020- March 2021).
It sis much than anyone’s expectations or the government’s budget. Finance Minister, Nirmala Sitharaman had marked a transfer of Rs 53,511 crore. The transfer of the amount is extremely surprising, but it will also provide a huge breathing space for the government.
The Chief Economist of ICRA, Aditi Nayar said,”The surplus to be transferred by the RBI to the Government of India is considerably higher than the budgeted level. This will offer a buffer to absorb the anticipated losses in indirect tax revenues during May-June, owing to the impact of state lockdowns on consumption on discretionary items and contact-intensive services”.
The RBI took the decision on the basis of the Jalan Committee formula. The committee recommended that the RBI must maintain a contingency risk buffer of 5.5 per cent of its balance sheet, at all times.
Earlier, the RBI transferred Rs 57,128 crore to the government for the accounting year 2019-20.