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Firing Up Growth: Government To Seek Funds From Parliament For Bank Recapitalisation, RBI Dividend Also On The Cards
Subhash Chandra Garg, Economic Affairs Secretary. (Pradeep Gaur/Mint via Getty Images)
The Union government will move forward to seek additional supplementary grants from the Parliament to increase the capitalisation of public sector banks (PSBs) and improve credit availability in the country, reports Mint.
The government is expected to make an announcement on the same in the Lok Sabha today (20 December). “Wait for the supplementary demand (for grants) which is likely to come up tomorrow,” said Economic Affairs Secretary, Subhash Garg, yesterday (19 December).
“Given that the RBI governor has changed, it is quite possible that some additional money could be brought in from the central bank in the form of dividend. Given the tightly packed budget and the government’s stand to maintain its expenditure commitments, it is not in a position to cut down on capital expenditure,” said Madan Sabnavis, chief economist at Care Ratings.
Mr Garg, when asked whether the government would seek an interim dividend from the central bank, he answered in the affirmative. RBI, whose fiscal calendar starts in July and end in June of the successive year, paid an interim dividend of Rs 10,000 crores to the government last year.
The Secretary also noted that a panel which will look into the economic capital framework of the RBI is in the final stages of finalisation.
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