In the annual report, the RBI says that as of June 30, 2019, it stands as a central bank with one of the highest levels of financial resilience globally.

Indian economy facing cyclical slowdown not structural RBI annual report
Money RBI Friday, August 30, 2019 - 10:43

The Reserve Bank of India's contingency fund fell to Rs 1.96 lakh crore on June 30, 2019 compared to Rs 2.32 lakh crore on the same date last year, a drop of 15 per cent year-on-year, as per the central bank's annual report.

The currency and gold revaluation account also saw a slide from Rs 6.96 lakh crore to Rs 6.64 lakh crore, the report said.

The contingency fund fell after the excess payout of Rs 52,000 crore.

However as per calculations by experts, the actual gain to the government from the RBI's surplus transfer of Rs 1.76 lakh crore is Rs 58,000 crore.

The annual report also states that the recent deceleration could be a soft patch mutating into a cyclical downswing, rather than a deep structural slowdown. But it recognises that there are structural issues in land, labour, agricultural marketing and the like that need to be addressed, it added.

For the central bank, reviving consumption demand and private investment will be the top priority this financial year. This could mean that the RBI will once again go for a rate cut.

The government has already budgeted Rs 90,000 crore as the dividend for FY20 and Rs 28,000 crore interim dividend has already been paid by the RBI to government in March 2019. 

So much of it is already paid or budgeted as a sum of Rs 1.18 lakh crore (Rs 90,000 crore plus Rs 28,000 crore) and if this is subtracted out of the Rs 1.76 lakh crore, then the actual gain to the government is Rs 58,000 crore, experts said.

In the annual report, the central bank, however, makes it clear that as of June 30, 2019, it "stands as a central bank with one of the highest levels of financial resilience globally".

After the payout to the government, "the balance in the contingency fund as of June 30, 2019 was Rs 1,96,344 crore compared to Rs 2,32,108 crore as of June 30, 2018", the annual report said. Rs 52,637 crore of excess provisions were identified as per the revised Economic Capital Framework (ECF) adopted at the meeting of the Central Board.

The net liquidity injection from the RBI as a result of this exercise will amount to Rs 1,48,051 crores (Rs 1,76,051 crore minus Rs 28,000 crores already paid). This is against an expectation of normal budgeted dividend of Rs 90,000 crore. 

The annual report published Thursday says the RBI computed exchange gains/losses using weighted average cost method, resulting in an impact of Rs 21,464 crore.

It also said income from domestic sources increased 132.07 per cent to Rs 1,18,078 crore from Rs 50,880 crore in the previous fiscal

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