As per the ‘State of Economy’ report by the Reserve Bank of India (RBI) in June 2021, India ranked 2nd after Turkey in terms of the shares of ‘Surplus Transferred from Central Banks to Governments’(as per percent of GDP). RBI has transferred 0.44 percent of GDP to the Government in FY21, in FY20 it was at the 4th position with 0.29 percent.
List of Top 5 countries under Surplus Transfer:
| Rank | Country | Surplus Transferred (as per percent of GDP in 2021) |
|---|---|---|
| 1. | Turkey | 0.50% |
| 2. | India | 0.44%(FY21) |
| 3. | Malaysia | 0.26% |
| 4. | Sweden | 0.13% |
| 5. | Kenya | 0.04% |
- RBI reported the surplus transfer of different countries based on World Economic Outlook (WEO) and Central Bank Annual Reports.
- Surplus transferred to Government – In May 2021, RBI transferred Rs 99,122 crore as surplus to the Central government for the accounting period of 9 months from July 2020 to March 2021, which is 50 percent higher than Rs 57,128 crore, the transfer approved in the accounting year 2019-2020. Click here to know more
Key Facts of the Report:
i.Due to the surplus transfer, RBI was characterised as ‘free-ranging’ and conducting independent monetary policy, i.e., independent of fiscal dominance.
ii.RBI reported India as the 5th largest reserve holding country in the world, the 12th largest foreign holder of US treasury securities and the 10th largest in terms of gold reserves.
Note – In early June the total foreign exchange(Forex) reserves of India crossed USD 600 billion.
iii.As per RBI report, in terms of projected imports for FY22, the current level of reserves would provide cover for less than 15 months, which is lower than other major reserve holders viz, Switzerland (39 months); Japan (22 months), Russia (20 months), and China (16 months).
iv.It also mentioned the co-existence of India’s reserves with net international investment in a position of (-) 12.9 percent of GDP.
v.RBI estimated the second wave of COVID-19 to make a loss of Rs 2 trillion from 2021-22 output.
vi.GST collected in May 2021 was Rs 1,02,709 crore, which was 65 percent higher than that in May 2020.
vii.In its latest Economic Outlook, on May 31, 2021, the Organisation for Economic Co-operation and Development (OECD) has revised up the global growth forecast for 2021 to 5.8 percent.
Recent Related News:
On April 23, 2021, due to the prevalence of the COVID-19, The Reserve Bank of India (RBI) has informed the continuation of the existing interim Ways and Means Advances (WMA) limit of Rs 51,560 crore for all states and Union Territories(UTs) for 6 months i.e. up to September 30, 2021.
About Reserve Bank of India(RBI):
Establishment– 1st April 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar
