Government started lottery after the budget! RBI-Banks will earn Rs 3.16 lakh crore

RBI and public sector banks may get a record dividend of Rs 3.16 lakh crore.Image Credit source: ChatGPT

The central government is expected to receive Rs 3.16 lakh crore as dividends and surplus from the Reserve Bank of India, nationalized banks and financial institutions in fiscal year 2026-27, which is about 3.75 percent more than the current fiscal year. According to the Revised Estimates (RE) presented in Parliament, the central government is expected to get about Rs 3.05 lakh crore during the current financial year, which was Rs 2.56 lakh crore in the general budget presented in February 2025. The budget documents also said that the dividend received from public sector companies and other investments is estimated at Rs 75,000 crore, which was Rs 71,000 crore in the budget for the current financial year.

In the revenue framework of the Union Budget, government receipts are broadly classified into tax revenue and non-tax revenue. Tax revenues – which include income tax, corporation tax, goods and services tax (GST), customs duties and excise duties – usually constitute the largest share of a government’s total revenue receipts, accounting for about 80 per cent or more of total revenue receipts, while non-tax revenues form the remaining smaller share.

Non-tax revenue is a recurring source of income that the government earns from activities other than taxation. This includes interest received on loans, fees and penalties, royalties, license fees (such as spectrum auctions), and dividends and profits received from government enterprises and the Reserve Bank of India (RBI).

In non-tax revenue, dividend transfers from RBI have emerged as one of the largest contributors in recent years. These transfers have increased significantly over the past decade, at times exceeding other dividend sources and boosting non-tax receipts.

Continuous increase in RBI dividend

In the last eight years, there has been a continuous increase in RBI dividend. Talking about the figures, a dividend of Rs 30,307 crore was seen in the financial year 2022, which came to Rs 2,68,590 crore in the financial year 2025. As a share of non-tax revenues, dividends have fluctuated widely, ranging from 8 per cent in FY2022 to 75 per cent in FY2019.

The increase in dividends paid by RBI in recent years, especially in FY2024 and FY2025, is attributed to strong surplus income and profits on RBI’s investment portfolio. Which includes foreign currency assets and government securities, due to which more surplus has been transferred than usual.

Importance of RBI Dividend

Although non-tax revenue is a relatively small component compared to taxes, it still plays a strategic role in balancing the fiscal math of the government. Dividend received from RBI, when high, helps in increasing non-tax revenue, thereby reducing to some extent the pressure on the government to meet the revenue target only through taxes or increased borrowing. This can help in controlling fiscal deficit. For example, the record handover made by the RBI for FY2025 provided additional fiscal space over the initial budget.