January 10, 2020 / 10:37 AM / 17 days ago

EXCLUSIVE-Indian gov't to seek cenbank dividend lifeline amid revenue shortfall -sources

NEW DELHI, Jan 10 (Reuters) - India’s government plans to push the central bank for a fiscal lifeline in the form of another interim dividend, as it struggles to meet its expenditure commitments amid a steep revenue shortfall, three sources directly aware of the matter said.

The fresh call comes just months after the Reserve Bank of India (RBI) approved a 1.76 trillion rupees ($24.8 billion) dividend payment to the federal government, including 1.48 trillion rupees for the current fiscal year.

One of the officials said the government wants the RBI to consider its demand given this financial year — which runs to March 31 — has been an “exceptional year,” with economic growth projected to fall to an 11-year low of 5%.

“We do not want to make an RBI interim dividend a regular thing, but this year can be treated as extraordinary,” said the source, adding the government is likely to push for an interim dividend of between 350 billion and 450 billion rupees ($4.9 to$6.3 billion)

If agreed, it would mark the third straight year in which the RBI has agreed to give the government an interim dividend.

Spokesmen for the finance ministry and RBI both declined to comment on the matter.

India’s Finance Minister Nirmala Sitharaman is expected to present the annual budget for the next fiscal year on Feb. 1. (Additional reporting by Swati Bhat in Mumbai; Editing by Euan Rocha and Toby Chopra)

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