To plug gaps in its budget before the general election next year, government on Wednesday said it will seek an interim dividend from the Reserve Bank of India for this fiscal year as it's a matter of principle, government official privy to the developments told CNBC-TV18.

It may be noted that in the financial year 2017-18, the RBI had made a surplus transfer of Rs 50,000 crore to the government (which comprised an interim transfer of Rs 10,000 crore). It was quite higher from Rs 30,659 crore in the previous financial year 2016-17, but lower than in the previous three years.)

The government said that it's not ruling out G-Sec buybacks of Rs 40,000-50,000 crore in the current fiscal and this maybe funded entirely from the small savings kitty, which is likely to exceed FY19 target of Rs 1.30 lakh crore, said government official familiar with the matter.

Further, the government said it's committed to meet the fiscal deficit target of 3.3 percent for FY19 and did not rule out some natural savings in the current fiscal year. However, expenditure savings may help government to manage additional demands and revenue gaps.

Talking on additional recapitalisation for public sector banks (PSBs), the government said it’s a larger policy call and the centre will decide parameters for more capital infusion if needed.

Under the RBI Act, 1934, the central bank is required to pay the government its surplus after making provisions for bad and doubtful debts, depreciation in assets and, contribution to staff and superannuation fund among others.

First Published:Nov 28, 2018 3:11 PM IST