The Reserve Bank of India’s dividend to the Government of India for 2016-17 is Rupees 30, 659 crores or Rupees 306.590 billion or USD4.7446bn as per the closing exchange rate of USDINR on June 30, 2017 (USDINR = 64.617547 as per x-rates.com).
The government had budgeted for a total banking sector dividend of INR74,901 crores (749 billion Indian rupees) for 2017-18, of which supposedly at least INR58,000 crores (580 billion Indian rupees) was expected out of Reserve Bank of India, according to this article in ‘Business Standard’. In 2016-17, the government had a revised estimate of INR76,171.80 crores (761.7 billion Indian rupees) under this header.
Source: Business Standard [Link]
The article says that the dividend was lower because RBI incurred cost due to the note-ban exercise of the Government of India – printing of new notes, interest paid to banks on excess liquidity deposited with it.
The lower dividend has implications for the fiscal arithmetic for 2017-18. Apart from that, the government also expected a fiscal windfall from the cancelled rupee notes from the ‘note ban’ exercise although, according to the BS article, Urjit Patel, RBI Governor, had ruled out paying a ‘windfall’ dividend because he had reckoned (correctly) that the cancelled notes remained the liability of the Reserve Bank of India.
Tallying up the costs of demonetisation vs. benefits would become an embarrassing exercise for the Government, one would presume.
(ht Andy Mukherjee for alerting me to this story early on Friday morning)