India Budgets for Lower Dividends from RBI, State Banks
That’s lower than the 1.52 trillion rupees the government estimates for the current year.
(Bloomberg) -- India’s government has budgeted for lower dividends from the central bank and state-run lenders in the coming fiscal year, relying instead on an ambitious plan to sell state assets to help finance the fiscal deficit.
For the fiscal year beginning April 1, the government expects to earn 896 billion rupees ($12.6 billion) in dividends from the Reserve Bank of India and state-run banks and financial institutions, according to the budget presented by Finance Minister Nirmala Sitharaman on Saturday.
That’s lower than the 1.52 trillion rupees the government estimates for the current year.
The RBI pays dividends to the government annually, and allocated 1.23 trillion rupees last year. Expectation of higher income from the sale of state-owned assets may have helped the finance minister pare reliance on dividend income this time around.
The government estimates that the RBI will pay about 600 billion rupees as dividend in the next fiscal year, Economic Affairs Secretary Atanu Chakraborty told reporters in New Delhi Saturday.
Sitharaman is expecting to raise 2.1 trillion rupees from divestment of state assets, up from 650 billion rupees budgeted in the financial year to March 2020. She’s targeting a budget deficit of 3.5% of gross domestic product in coming year, down from 3.8% this fiscal year.
--With assistance from Vrishti Beniwal.
To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram
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