The RBI has decided to transfer surplus of Rs. 2.11 trillion to the government for year FY 2024.  The transfer is made even after increasing the buffer to 6.5%. The Jalan Committee has proposed to maintain buffer in the range of 5.5% to 6.5% of the RBI’s balance sheet.  The ongoing growth of economy has prompted the RBI to increase buffer at 6.5% and also pay an amount of Rs. 2.11 trillion to the government.  This payment will provide the government a cushion and greater elbow room for expenditure management. 

The transfer of surplus amounting to Rs. 2.11 trillion will help the government to reduce its budget deficit and ensure that aim of government to maintain fiscal deficit to GDP ratio at 5.1% is maintained or even can be lowered further. The government has set a target of 4.5% of fiscal deficit to GDP ratio by 2026.