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Govt says not eyeing RBI's surplus, but need to fix capital policy

9 November, 2018 8:35 AM
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Govt says not eyeing RBI's surplus, but need to fix capital policy

DEA Secretary Subhash Chandra Garg has ruled out any immediate request for transfer of a part of RBI’s funds. But he said the government is proposing to review and define uses of funds on the central bank’s balance sheet.

Amid a tussle between the Reserve Bank of India and the central government, the government said it was not eyeing taking away a part of the RBI’s surplus, a demand believed to be a bone of contention between the two.

“[A] lot of misinformed speculation is going around in media. The government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer 3.6 or 1 lakh crore, as speculated,� Subhash Chandra Garg, Secretary of the Department of Economic Affairs, tweeted today.

He pointed out that the government had successfully brought down its fiscal deficit – or the gap between the government’s expenses and earnings – from 5.1 percent of GDP in 2013-14 to an estimated 3.3 percent this fiscal.

The secretary, however, tweeted that the only proposal under discussion is “to fix appropriate economic capital framework� of the Reserve Bank.

The Economic Capital Framework (ECF) defines the central bank’s capital and internal reserves policy.


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