Fiscal bonanza

RBI transfer should be used for fiscal consolidation

The Reserve Bank of India (RBI) on Wednesday announced its board had determined how much surplus it would transfer to the Government of India. The sum, Rs 2.11 trillion, came as a surprise. In the interim Budget 2024-25, presented by the Union finance minister earlier this year, the amount expected was merely Rs 1.02 trillion. Thus, there is a Rs 1.09 trillion windfall for the government this fiscal year. This is in spite of the board raising the contingency risk buffer to 6.5 per cent of the RBI’s balance sheet, the highest level recommended under guidelines announced a few years