The Reserve Bank of India (RBI) board last week decided to transfer a Rs 87,416-crore surplus for 2022-23 to the Government of India. The government had budgeted for Rs 48,000 crore as surplus from the RBI, state-owned banks, and financial institutions. The surplus is almost three times what the central bank transferred for 2021-22, though it accounted for only nine months because of the change in the RBI’s accounting year. The surplus is estimated to have been pushed by the central bank’s foreign currency market operations. Since the RBI has decided to transfer 82 per cent more than the budgeted amount under the given head, other things being equal, it should help the government reduce the fiscal deficit from the budgeted 5.9 per cent of gross domestic product (GDP). As the state-run banks are doing well, the inflow under this head could be significantly higher by the end of the year.
However, there are various other moving parts that would also shap
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