Centre rejects reports of its proposal to RBI seeking transfer of Rs 3.6 lakh crore

Economic Affairs Secretary Subhash Chandra Garg on Friday rejected media reports that Centre has sought Rs 3.6 lakh crore capital from the Reserve Bank of India (RBI), adding that the government’s fiscal math was completely on track.

“Lot of misinformed speculation is going around in media. Government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer Rs 3.6 or 1 lakh crore, as speculated,” Garg wrote on Twitter.

Lot of misinformed speculation is going around in media. Government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer 3.6 or 1 lakh crore, as speculated. (continued...).

— Subhash Chandra Garg (@SecretaryDEA) November 9, 2018

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The Economic Affairs Secretary asserted there would be no change in government’s fiscal deficit target of 3.3 per cent for the current financial year. He, however, said that the “only proposal under discussion is to fix appropriate economic capital framework of RBI.”

“Government’s FD (Fiscal Deficit) in FY 2013-14 was 5.1%. From 2014-15 onwards, Government has succeeded in bringing it down substantially. We will end the FY 2018-19 with FD of 3.3%. The government has actually foregone 70000 crore of budgeted market borrowing this year,” he said in a series of tweets.

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Earlier, there were media reports claiming that amid that standoff between the government and the RBI, the Finance Ministry had sought transfer of surplus of Rs 3.6 lakh crore from the central bank. As per the reports citing sources, the RBI didn’t accept the government’s proposal.