'Real hard work is paying': Nikunj Dalmia on RBI's Rs 2.11 lakh crore dividend to govt | Editor's Take
'real hard work is paying': nikunj dalmia on rbi's rs 2.11 lakh crore dividend to govt | editor's take
RBI Dividend 2024: The Reserve Bank of India (RBI) on Wednesday approved the highest-ever dividend payout of Rs 2.11 lakh crore to the government for the financial year 2023-24. The decision will help the government to better manage the fiscal deficit.
Speaking on its relevance, ET NOW Editor-in-chief Nikunj Dalmia said that the central ban has given dividend purely based on the strength of the balance sheet.
"The RBI also has a balance sheet just like a company. They make investments and they benefit because of their investments in bonds and because of their forex reserve and forex currency intervention. So it is profit what they have generated. They are giving profit in the form of a dividend," he said.
"Now, this dividend is much, much, much higher than what everybody was expecting and anticipating. Now, when the money comes into the government, what will they do? This will give government ability to manage fiscal deficit. Fiscal deficit is not a concern, but the fiscal deficit number will suddenly start looking better. This also gives government more ability now to plan big and to spend big. There are pockets in the economy which do need government support. This money could move there," the Editor-in-chief said.
"If the fiscal deficit comes down, then government's spending is likely to increase... on the expenditure front, which is the government have been spending, I think you will see mega projects," he said.
"You may see some announcements in the first 100 days if the government comes back. Now they have a buffer. But more importantly, from a capital market standpoint, the liquidity condition in the market will come down, yields will come down... the pressure with the banking system has gone through because of lack of liquidity. That also will get better. So it is a wonderful surprise. You know, it is like nobody was expecting something like this," Nikunj Dalmia added.
"Imagine it is your birthday and you get a wonderful surprise. It is like one of those things that you have got always welcome. It is a welcome surprise. And you got to just applaud Reserve Bank of India, the way they manage their balance sheet in this kind of a tricky global environment. The forex reserve, without taking any risk, taking care of the capital buffers, they have given such a flag dividend. It is not arm twisting, it is real hard work which is paying," the Editor-in-chief said.
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