The importance of the Reserve Bank of India's dividend to the Indian government cannot be overstated. In 2024-25 (Apr-Mar), it made up almost 7% of the Centre's total revenue receipts and could have financed more than 13% of the full-year fiscal deficit of INR 15.70 trillion. So, any action that impacts the money the central bank transfers to the Centre has the potential to upend, for better or worse, India's fiscal math. And one such action is currently underway.
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