RBI's record dividend payout to provide partial cushion to stressed govt finances: Experts

The Reserve Bank of India's record dividend payout of Rs 2.87 lakh crore may provide limited relief to the government's finances amid the ongoing West Asia crisis.

Reserve Bank of India's record dividend payout of Rs 2.87 lakh crore would provide only limited relief to the government's stressed finances amid the ongoing West Asia crisis, experts said.

The all-time high dividend declared on Friday is 6.7 per cent greater than Rs 2.69 lakh crore for the 2024-25 fiscal.

Surplus transfer by RBI alone accounts for 91 per cent of the budgeted non-tax revenue under 'dividend/surplus of Reserve Bank of India, Nationalised Banks & Financial Institutions' head for FY27.

So, with the flow of dividends by public sector banks and financial institutions, the estimate of Rs 3.16 lakh crore from dividends and surpluses from the Reserve Bank of India, nationalised banks and financial institutions in 2026-27 will definitely exceed by a decent margin, as state-owned lenders have also earned handsome profits.

The aggregate net profit of public sector banks increased 11.1 per cent to a historic high of Rs 1.98 lakh crore, marking the fourth consecutive year of aggregate profitability for the PSU lenders.

The RBI's dividend to the Government of India, at Rs 2.9 trillion, is in line with the expectations for the fiscal and around 7 per cent higher than last year's level, ICRA Chief Economist Aditi Nayar said.

As compared to the Budget Estimates, the fisc is expected to remain under pressure owing to expectations of higher fertiliser and fuel subsidy requirements, and lower tax collections and OMC dividends due to the West Asia crisis, she added.

''While the Economic Stabilisation Fund and customs duty hikes on gold and silver imports are likely to provide some cushion, we expect the government of India to exceed the budgeted fiscal deficit target for FY27 of 4.3 per cent of GDP by 40 bps, assuming an average crude oil price of USD 95/barrel in the fiscal,'' she said.

According to India Ratings & Research Chief Economist Devendra Kumar Pant, a higher surplus transfer will reduce some pressure on the fiscal deficit due to the geopolitical situation.

Surplus transfer, Fiscal Stabilisation Fund and Expenditure control may help in controlling the fiscal deficit in FY27, he said.

The transfer would have been Rs 64,518 crore higher had RBI limited contingency risk buffer (CRB) to the last year's level of Rs 44,862 crore, he said, adding, transferring a higher amount to the CRB will help in RBI intervening in the financial market as per the evolving domestic and global macroeconomic conditions.

However, Kotak Mahindra Bank Chief Economist Upasna Bhardwaj said the RBI surplus transfer is marginally lower than expected, thereby limiting the levers for the government in terms of managing the fiscal slippage risks.

''While we do not see extra borrowing risks for now, we continue to monitor the extent of subsidy and tax growth slowdown,'' she said.

The RBI's record surplus transfer of Rs 2.87 lakh crore for FY26 gives the government a strong fiscal cushion at a time of global uncertainty, Resurgent India MD Jyoti Prakash Gadia said.

It gives the Centre room to support priority spending on infrastructure, healthcare, education, digital expansion and renewable energy, while helping keep the fiscal deficit under control, he added.