Finance Minister Nirmala Sitharaman on Tuesday said questioning the credibility of the Reserve Bank of India (RBI) after it passed on surplus Rs 1.76 lakh crore to the government was “outlandish” and “worrying”.
The RBI decision came on Monday after the Bimal Jalan Committee constituted by it to determine excess capital submitted its report to the federal bank. The decision also signals the end of the discretionary power enjoyed by the RBI on dividend payouts. In the current fiscal, the RBI will pay out Rs 1.23 lakh crore of surplus and Rs 52, 637 crore of excess contingency provisions lying in its books.
Reacting to criticism, Sitharaman said, considering the fact that the committee was appointed by the RBI, any suggestions about bank’s credibility “seems a bit outlandish”. She was addressing a press conference after meeting GST officials in the city.
“Comments being offered on the credibility of RBI, I am afraid to say, are comments on the RBI and its selection on the committee and is a worrying sign,” said Sitharaman while responding to a question about a further decline in the federal bank’s ratings if the transfer of surplus was made.
The additional amount of Rs 86,000 crore that the government will receive this year above its budgeted Rs 90,000 crore as transfers from RBI could be either used to provide fiscal stimulus to a sagging economy, reduce off-balance-sheet borrowings or meet the expected shortfall in revenue collections.