According to India Ratings and Research, the mega dividend would improve the fiscal condition of the federal government and may result in more expenditure, fiscal consolidation, or a mix of the two.
The government would get a dividend of Rs 2.11 lakh crore from the earnings made in 2023–2024, as determined by the RBI board last week.
The RBI's Rs 2.11 lakh crore dividend transfer is expected to relieve liquidity strain and lower bank deposit rates if the government spends the money, according to India Ratings and Research (Ind-Ra) on Thursday.
According to the statement, the mega dividend will improve the fiscal condition of the central government and may result in more expenditure, fiscal consolidation, or a mix of the two. But in the medium to long run, banks will still have structural difficulties with regard to deposit accretion.
"The agency expects the RBI's INR 2.1 trillion dividend payment to the government will improve the liquidity conditions and decrease heightened pressure on the banking system deposit, which will cause the easing of pressure on cost of liabilities for businesses in the near term," Ind-Ra said in a statement.
The government would get a dividend of Rs 2.11 lakh crore from the earnings made in 2023–2024, as determined by the RBI board last week.
According to Ind-Ra, if the government spends the money, it would lessen the continuous strain on the banking system's deposit accretion and overall rates.
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