oppn parties Centre Gets RBI Bonanza Before Full Budget

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  • Allahabad HC said that the UP Police is acting as law unto themselves as they detained a person unlawfully even before his arrest
  • Kolkata witnesses traffic snarls on the first day of the Durga Puja festival as revellers start pnadal-hopping
  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
  • Delhi Police detained Cockroach Janta Party founder Abhijeet Dipke, Neha Bora of AISA, student leaders and supporters ahead of a rally in Connaught Place demanding Chief Election Commissioner Gyanesh Kumar's resignation. The protest followed the detention and jailing of two CJP leaders earlier in the week over demonstrations at Jantar Mantar
  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
  • Indian shuttler Jagsher Singh Khangurra secured a bronze medal at the BWF World Junior Badminton Championships in Cairo
  • The Supreme Court of India upheld the Bombay High Court's decision quashing the 2020 write-off of ₹8,415 crore in additional tier-1 bonds issued by Yes Bank (Yes Bank). The court ruled that the bank's administrator lacked the authority to extinguish the bonds under the final reconstruction scheme, strengthening bondholders' claims
  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
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Centre Gets RBI Bonanza Before Full Budget

By Our Editorial Team
First publised on 2024-05-24 16:23:13

About the Author

Sunil Garodia The India Commentary view

The Centre received an unexpected bonanza - the RBI approved the transfer of Rs 2.1L cr as surplus to it. This is 140% more than what was transferred in 2023 and much higher than what the government was expecting. This has provided the government a lot of breathing space in managing the budgetary accounts. It can either use the funds to reduce the fiscal deficit to the target of 5.1% aimed for the year or increase spending on infrastructure projects or use a mix of both. In all cases, full budget of the new government in July will have a lot less of financial jugglery and a lot more of solid numbers riding on this booty.

As per the numbers, the RBI dividend translates to between 0.6% and 0.7% of the GDP which is huge. The government had planned to reduce the fiscal deficit from 5.8% last year to 5.1% in this fiscal. The RBI dividend alone can help in achieving this. But that would not make sense as fiscal deficit has to be reduced by fiscal discipline which means curtailing revenue expenditure or generating additional income (through disinvestment, for one, where the government’s plans have not materialized in the last 10 years) and reducing revenue deficit. If the revenue deficit in 2024-25 remains the same or balloons further, the RBI largesse would have a negative effect as it will fail to bring fiscal discipline in the system. Hopefully, with the elections done and dusted (which means that there is no immediate need of playing to the gallery by announcing additional welfare schemes), the new government will show fiscal prudence and reduce both revenue deficit and fiscal deficit.

The NDA government has been following the path of fiscal consolidation since the last few years. It must continue to do so. The RBI bonanza is a one-off. It can be used wisely to achieve a lot of things but it must not lead to fiscal indiscipline. 

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