RBI fund transfer: Can Rs 1.76 lakh crore save the NDA again?

Mangalore Today News Network

New Delhi, Aug 27, 2019 : Rs 1.76 lakh crore stands etched in the collective consciousness of the entire nation. It’s the number that more or less was the reason for the UPA being kicked out of power, allowing the NDA to take the reins. Now that almost mythical number- 1.76 lakh crore- is back in the news in the most uncanny way, Yahoo reported.

 

It is the amount that the Reserve Bank of India (RBI) has approved as a payout to the government.

The money, which is expected to be credited to the government coffers today itself, has not come a day too soon as the government is under enormous pressure to lift an unmistakably sagging economy.

The RBI payout is a regular dividend and transfer of surplus. But Rs1.76 lakh crore is still a windfall, as the expected surplus transfer (as reflected in the Budget) was ‘only’ Rs 90,000 crore.

The extra 86,000 crore will come in handy, since the government announced, just the other day, an injection of around Rs 77,000 crore to State-run banks to provide an impetus to the economy.

But for the critics of the government, everything looks too pat. The government announcing a stimulus package of sorts that almost recants the terms of the Union budget, and the RBI immediately announcing an unexpectedly huge payout seems too coincidental for the opposition to swallow.

The scepticism is understandable given the government’s track record in managing its finances.

Though the amount to be released is in line with the recommendations of the Bimal Jalan Committee, the board meeting chaired by RBI Governor Shaktikanta Das approved the payout, and hence it has been felicitously dubbed as "Das Capital".

But this huge amount also offers one last chance for the government to bail itself (ahem, the country) out of the crisis.

It should use the amount judiciously and recapitalise the banks, which in turn should lead to more lending from the banks. This should eventually lead to more lubrication to the industries and improve the economy overall.

The Rs.1.76 lakh crore amount has once again came to the aid of the NDA.

Now can the same number work a different magic? The government and its backers sure hope so.