September 29, 2019 / 1:58 PM / 21 days ago

Government may seek $4.3 billion interim dividend from RBI: media reports

A worker walks past the logo of Reserve Bank of India (RBI) inside its office in New Delhi, India July 8, 2019. REUTERS/Anushree Fadnavis/File Photo

MUMBAI (Reuters) - The Indian government may request an interim dividend of around 300 billion rupees ($4.3 billion) from the Reserve bank of India (RBI) in order to meet its fiscal deficit target, Mint newspaper reported on Sunday citing news agency Press Trust of India (PTI).

The government is likely to seek the dividend payment towards the end of the April-March financial year to meet the government’s fiscal deficit target of 3.3% of gross domestic product, government sources told the PTI.

The federal government could request an interim dividend of 250 billion to 300 billion rupees from the RBI during the current fiscal year, one source said, adding that a final assessment would be made in early January.

The Finance Ministry and RBI were not immediately available for comment.

As the manager of government finances, the central bank pays the government a dividend each year to help the government meet its financial targets.

Last year the RBI paid the government an interim dividend of 280 billion rupees.

Expectations of the government missing its fiscal deficit target have risen following a number of measures taken to lift growth from six-year lows of 5% in the first quarter of the current financial year.

Analysts also say the government could resort to stake sales in state-run companies to bridge its revenue deficit and avoid a fiscal slippage.

Reporting by Swati Bhati; Editing by Aditya Kalra and Susan Fenton

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