While the questions of the Reserve Bank of India’s ‘excess’ or ‘optimal’ reserves are vexed ones, the government has reasons to feel the central bank is warier than it ought to be. Prior to 2014, the RBI used to transfer a part of its gross (realised) income to CF and ADF — funds meant for meeting unexpected contingencies and internal capex needs, respectively — and transfer the net amounts (post-expenditure), which is recognised as ‘net disposable income (NDI)’, to the government. Between 2014-2016, when Raghuram Rajan was at the helm, almost the entire NDI (sans any transfers to CF and ADF) went to the government’s kitty, thanks to suasion by a fiscally stressed government.
Urjit Patel as the governor, however, has been less generous — before recognising the disposable amount (which is fully transferable to the government), portions of what-would-have-been-surplus have got transferred to CF and ADF on the expenditure side over the last two years. The sum transferred in this manner to CF-ADF was Rs 13,190 crore in 2017 and Rs 14,190 crore in 2018.