Budget 2024: In the upcoming budget for 2024-25, the government plans to increase dividend earnings significantly, targeting about Rs 70,000 crore from the Reserve Bank of India (RBI) and financial institutions (FIs). According to PTI, this comes after a successful financial year with higher-than-expected dividends from the RBI.
Finance Minister Nirmala Sitharaman will present the interim Budget in the Lok Sabha on February 1. Sources suggest that the government aims to surpass the estimated dividend of Rs 48,000 crore from financial institutions in the current fiscal year.
The RBI’s dividend payment for the current financial year has exceeded expectations, reaching Rs 87,416 crore. With the favourable performance of public sector banks and financial institutions in recent quarterly reports, there is an expectation that their dividend payouts in the next fiscal year will surpass the current year’s figures.
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According to sources, a reasonable expectation is that the government will receive approximately Rs 70,000 crore as dividends from the RBI and financial institutions in the fiscal year 2024-25. In the Union Budget for 2023-24, the government had set a 17% higher dividend target at Rs 48,000 crore from the RBI, public sector banks, and financial institutions, and this target has been comfortably exceeded.
But this target was greatly exceeded when the Reserve Bank transferred a surplus of Rs 87,416 crore to the central government for the fiscal year 2022-23.
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The surplus transfer of Rs 87,416.22 crore by the Reserve Bank during 2023-24 significantly exceeded both the previous year’s amount (Rs 30,307.45 crore) and the budgeted amount of Rs 48,000 crore for Dividend/Surplus transfer. In the preceding fiscal year, the government had collected Rs 40,953 crore from the RBI and public sector financial institutions.
The significant rise in dividends from banks and financial institutions, along with increased tax collections, is anticipated to help the government follow a fiscal deficit reduction plan. The government’s goal is to decrease the fiscal deficit to under 4.5% by 2025-26, down from the estimated 5.9% of GDP in 2023-24, as outlined in the fiscal consolidation roadmap. In the upcoming financial year, beginning April 1, 2024, the government is required to lower the fiscal deficit to 5.4%, following the roadmap.
