The fiscal deficit of the central government could ease by 20 to 30 basis points from the budgeted level of 4.5 percent to 4.2 percent of GDP by the bumper dividend transfer by Reserve Bank of India, according to a report by State Bank of India.
The Union Budget for 2025-26 had projected a dividend income of Rs 2.56 lakh crore from the Reserve Bank and public sector financial institutions.
Gold Rate
24 May 2025
However, with the latest transfer from the RBI, the actual dividend income will be much higher than budgeted.
The report mentioned that this additional revenue gives the government more fiscal room, either to reduce its deficit or to spend more in priority areas.
SBI said, “We expect fiscal deficit to ease by 20 to 30 bps from the budgeted level to 4.2% of GDP. Alternatively, it will open up for additional spending.”
It noted that the bumper dividend transfer not only strengthens the government’s fiscal position but also offers support in managing the yield curve amidst global financial uncertainties.
It also provides a boost to the RBI’s Contingency Risk (CR) buffer, enhancing its financial resilience.
