New Delhi: The Bimal Jalan panel, set up to review the economic capital framework of the Reserve Bank of India (RBI), is consulting newly appointed Economic Affairs Secretary Atanu Chakraborty and is preparing to give its recommendations to the central bank later this month, a person privy to the discussions said after the panel’s meeting here on Monday.
The panel will give its report after holding one more meeting in the next few days, the person said on condition of anonymity. It is yet to take a call on whether to carry a dissent note written by S C Garg, former secretary in the department of economic affairs, who has recently been shifted to the power ministry, said the person who spoke on condition of anonymity.
The panel has made up its mind to recommend transfer of surplus reserves of the central bank to the government in a gradual way over a five-year period as per a formula, the person said. This could help the government meet its fund requirement at a time tax revenue growth is slowing down in line with a slowdown in economy. Sitharaman has budgeted to receive over ₹1 trillion this fiscal from RBI through dividends. Garg is said to have favoured a one-time transfer of surplus reserves instead of a staggered one, Mint had reported on 17 July.
The government views that a part of RBI’s huge reserves could be used for more productive purposes has in the past soured relations between the finance ministry and the central bank. The uneasy relation between the government and the central bank had led to the previous RBI governor Urjit Patel quitting the post last year before his term ended. The government subsequently appointed Shaktikanta Das, a former secretary in the finance ministry as the governor.