Finance Minister Arun Jaitley will address the Board of Directors of the Reserve Bank of India (RBI) this morning to apprise them about major policy decisions taken by the government in the interim Budget of 2019-20.
In his customary post-Budget meeting, Jaitley is also likely to inform the RBI board about the steps taken to contain fiscal deficit and may underline the need for reducing interest rates further to promote growth.
Acting Finance Minister Piyush Goyal, in his reply on the Budget in Parliament, had said that the government would most likely meet the fiscal deficit target of 3.3% for 2018-19, when the revised estimates come after March 31. He had said that the Centre had missed the target by a whisker to 3.36%, which was not difficult to meet.
The Board of Directors of RBI, headed by Governor Shaktikanta Das will also discuss and review, for the first time, its half-year income till December 31.
The review comes in the wake of a demand for Rs 28,000 crore more of dividend from the RBI this year which is over and above the payment of Rs 40,000 crore to the Centre.
RBI follows a July-June calendar.
Prompt Corrective Action of banks and SME lending issues will also be discussed in the meeting, sources said.
Centre's direct tax collection has doubled this year and on the non-tax side, the divestment target has also crossed Rs 56,000 crore of the Budgeted Rs 80,000 crore for 2018-19. Against this backdrop, Jaitley may assure the RBI Governor that the Centre is almost confident of meeting the target.
The Centre has breached fiscal deficit target for the second consecutive year but this year only by a whisker. The fiscal deficit now stands at 3.36% of GDP as against the target 3.3%.