Budget 2022: Govt expects lower dividend from RBI and banks in FY23
Premium- As per the Budget document, dividends from public sector enterprises and other investments have also been pegged lower at ₹40,000 crore as against RE of ₹46,000 crore.
The union government is expecting a 27% lower dividend at ₹73,948 crore from the Reserve Bank of India (RBI) and public sector banks and financial institutions in 2022-23.
In absolute terms, this is nearly ₹27,400 crore lower than the Revised Estimates (RE) of ₹1,01,353 crore under the head of dividend or surplus of Reserve Bank, nationalised banks & financial institutions during the current fiscal.
During the current financial year alone, the RBI has paid a dividend of ₹99,122 crore. This dividend payout was for the financial year 2020-21 paid in May last year.
As per the Budget document, dividends from public sector enterprises and other investments have also been pegged lower at ₹40,000 crore as against RE of ₹46,000 crore.
Total dividend collection of the next financial year would be ₹1.31 trillion as against the RE of ₹1.68 trillion, as per the RE of 2021-22.
Sitharaman has proposed to increase the size of the economy’s annual spending to ₹39.5 trillion ($529 billion) to support growth plans for the year beginning April.
The government has enhanced the outlay for capital expenditure sharply by 35.4% from ₹5.54 lakh crore in the current year to ₹7.5 lakh crore in 2022-23. This is also an increase of more than 2.2 times the expenditure of 2019-20 and the outlay 23 will be 2.9% of GDP, Sitharaman said.
"The 2022-23 budget finely balanced fiscal retreat with supporting economic recovery. The budget focussed on a familiar strategy of driving capital expenditure to drive growth, with the intention of crowding in private investment through higher public spending, said Abheek Barua, chief economist at HDFC Bank.
The Nifty 50 and S&P BSE Sensex stock indexes jumped nearly 1.5% on a boost in capital expenditure, while the rupee was last slightly stronger at 74.54 against the dollar.
The increased spending will leave the government with a fiscal deficit of 6.4% of gross domestic product (GDP). A Bloomberg estimate has seen the deficit at 6.1%.
The government will end the current financial year with a deficit of 6.9% of GDP against a Budgeted target of 6.8%.
Although markets could be disappointed with a higher fiscal deficit of 6.4% of GDP for FY23 than expected, it is perhaps prudent to not undertake aggressive fiscal consolidation at this nascent stage of recovery, Barua said.
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