Mumbai:The RBI decision to transfer Rs 1.76 lakh crore to the Central government in the current year will help strengthen its fiscal position in the backdrop of the economic slowdown, Acuite Ratings said on Wednesday.
A significantly higher net one-time inflow of Rs 1.48 lakh crore from the Reserve Bank of India (RBI) will provide an opportunity to the government to step up public investments without a material slippage in the fiscal deficit target pegged at 3.3 per cent for 2019-20, an Acuite report said.
Acuite Ratings expects the transfer to the government's revenue account under the head "Interest Receipts, Dividends and Profits" to improve its fiscal position in the context of weaker tax revenues in the current fiscal vis-a-vis the projected levels.
As a result, the sub-entry of "Dividend and Profits" may reach a level of Rs 2.2 lakh crore as compared to the budget estimate of Rs 1.63 lakh crore, a windfall of Rs 60,000 crore as per Acuite Ratings estimates.
The additional flows over the budgeted figures will have a positive impact on the "revenue deficit, which may decline to Rs 4.2 lakh crore from the budget estimate of Rs 4.8 lakh crore -- a decline of almost 12.5 per cent."