RBI’s Record Surplus Transfer to Union Government

RBI’s Record Surplus Transfer to Union Government


The Reserve Bank of India (RBI) has announced a historic transfer of ₹2,10,874 crore as surplus to the Union government for the financial year 2023-24.

  • This amount is more than double the transfer made in the previous fiscal year and is expected to significantly support fiscal consolidation efforts.

GS-03 (Economy)

Recent Developments:

  • The RBI’s surplus transfer for FY24 is ₹2,10,874 crore, a substantial increase from the ₹87,416 crore transferred in FY23.
  • This decision also includes raising the Contingent Risk Buffer (CRB) from 6% to 6.50%.
  • Basis of Transfer: The surplus transfer is grounded in the Economic Capital Framework (ECF) established by the RBI in August 2019, following the recommendations of the Expert Committee to review the existing framework.

Key Issues:

  • Economic Impact: The significant transfer prompts questions about its effects on the RBI’s balance sheet and its capability to handle future economic uncertainties.
  • Fiscal Dependency: The government’s reliance on RBI transfers for fiscal consolidation raises concerns about the sustainability of revenue generation and adherence to fiscal discipline.


  • Fiscal Consolidation: Economists view this transfer as a crucial step towards the government’s fiscal consolidation targets, providing essential fiscal space.
  • Revenue Enhancement: The substantial gain boosts government revenue, potentially decreasing the need for borrowing and improving the fiscal deficit outlook.
  • Economic Stability: The higher surplus transfer reflects strong income from the RBI’s domestic and foreign assets, indicating economic stability and efficient asset management by the central bank.

Way forward:

  • Efficient Fund Utilization: The government must ensure the surplus funds are used efficiently for productive investments that drive economic growth.
  • Structural Reforms: Implementing structural reforms to boost sustainable revenue sources and reduce dependency on RBI transfers is vital.
  • Maintaining Fiscal Discipline: Sustaining fiscal discipline through controlled expenditure and improved tax compliance is essential for long-term economic stability.