The centre received an unexpected talk from the Reserve Bank of India last week (3rdweek of May). Even though the income fell 10.98%, expenditure decreased by 63.10% enabling RBI to provide this bonanza to the centre.
After completing the report for March 2021, the Reserve Bank of India announced its verdict to transfer the 99,122 crores. Many factors have contributed to the rapid growth. After the transfer took place in the 19th fiscal year where 1.76 lakh crores transfer took place this is the second-largest transfer as recommended by the Bimal Jalan Committee.
With the release of the RBI Annual Report 2020-2021 on May 27, this is a surprise. Although the above two main competitors undoubtedly contributed to this. The main reason for the sharp increase in surplus was the drastic reduction of reserves. Although revenue fell by 10.96%, expenditures fell by 63.10%, which allowed the Reserve Bank of India to provide this huge wealth to the government.
Report your income into two main categories: interest income and other income. For the nine months ending March 2021, interest income decreased by Rs 40,300 crore, while “other income” increased by Rs 23,880crore, resulting in a decrease of Rs 16,397 crore in total income. FOREX gains from the sale of foreign securities, and gains from Indian securities are the main contributors to the spike in wealth.
The exchange rate gains and losses in foreign exchange transactions are the results of the depreciation of the rupee. When the Reserve Bank of India sells U.S. dollars, it sells them at the current exchange rate and makes a profit, because the cost of acquiring these U.S. dollars is considered a weighted average historical cost.
March 21, provisions accounted for 60.65% of total costs, while provisions for the year ended June 2020 shown for 79.55% of total costs. According to Capital Structure Jalan Committee, the Reserve Bank of India establishes reserves (mainly in its “reserves”) as a percentage of the balance sheet size. That was Rs 20,710crore compared to Rs 73,615 in 2020.
So, the increase in the Contingency Fund is Rs 20,508 crore as against Rs 67,690 crore in the financial year 2020. Also, the surplus funds can be used by the centre to support the volatile segments.
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