A bonanza from the central bank will help meet the government’s 4.4% fiscal deficit target for the current financial year
Published Fri, May 23, 2025 · 08:21 PM
[NEW DELHI] India’s central bank will give a record dividend to the government, shoring up finances to bolster growth in Asia’s third-largest economy.
The Reserve Bank of India board approved the transfer of US$31.6 billion, the central bank said in a statement on Friday (May 23). The figure compares with a budgeted estimate of 2.56 trillion rupees (S$38.5 billion) as dividend from the RBI and state-owned banks, and a previous record payout of 2.11 trillion rupees last year.
The RBI makes an annual payout to the government from the surplus income earned from investments and valuation changes on its foreign exchange holdings, including the dollar, and the fees it gets from printing currency notes.
A bonanza from the central bank will help meet the government’s 4.4 per cent fiscal deficit target for the current financial year by fortifying its finances and offset a shortfall in tax collections due to weak growth. It will also create a cushion for any potential losses from import duty cuts as trade talks proceed.
Details on how the RBI managed to generate this substantial surplus will be disclosed in its annual report, expected to be released in the coming days. BLOOMBERG
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