Lok Sabha Question No. 2387 (UNSTARRED), answered on 2021-12-13
Subject: Transfer of Funds by RBI
Ministry: FINANCE
Asked by: Dibyendu Adhikari

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO.2387

ANSWERED ON MONDAY, THE 13 th  DECEMBER, 2021

## Transfer of Funds by RBI

## 2387. SHRI DIBYENDU ADHIKARI:

Will the Minister of FINANCE be pleased to state:

- (a) Whether the Reserve Bank of India (RBI) has recently transferred ₹ 99,000 crores as surplus to the Government and if so, the details thereof;
- (b) Whether  RBI  sold  85.2  billion  dollars  of  its  foreign  exchange  reserve  from  July 2020 to August 2021 and if so, the details thereof;
- (c) The rules under law and Act of the RBI for directly financing the Government's expenditure; and
- (d) The  reasons  as  to  why  RBI  needs  to  sell  this  high  amount  of  foreign  exchange reserve?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) The Reserve Bank of India (RBI) has transferred an amount of ₹ 99,122 crore as surplus  to  Government  of  India  for  the  accounting  year  2020-21,    after  making necessary provisions as per RBI Act, 1934.
- (b) During  July  2020  to  August  2021,  the  Reserve  Bank  of  India  engaged  in  net purchases of US Dollars as shown in the Annexure.
- (c) The Government expenditure is financed by mobilising resources through various sources  viz.,  tax  and  non-tax  receipts,  non-debt  capital  receipts  etc.  Government also  borrows  the  funds  from  market  and  other  sources  to  finance  the  excess  of expenditure  over  receipts.  RBI  facilitates  Government  to  avail  WMA/OD  to  a certain extent by charging interest.
- (d) Regulation  and  management  of  foreign  exchange  in  the  country  is  an  important function  of  RBI  with  an  objective  to  facilitate  external  trade  &  payments  and  to promote  orderly  development  and  management  of  foreign  exchange  market  in India. RBI purchased more amount of US Dollars than it sold and thus remained net purchaser of US Dollars during the period July 2020 to August 2021.

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## Annexure

| Month          | Net Purchase/ Sale of Foreign Currency (US$ Million)   | Purchase (+) (US$ Million)   | Sales (-) (US$ Million)   |
|----------------|--------------------------------------------------------|------------------------------|---------------------------|
| August-2021    | 3,747.00                                               | 10,887.00                    | 7,140.00                  |
| July-2021      | 7,205.00                                               | 16,160.00                    | 8,955.00                  |
| June-2021      | 18,633.00                                              | 21,923.00                    | 3,290.00                  |
| May-2021       | 5,842.00                                               | 7,142.00                     | 1,300.00                  |
| April-2021     | 4,212.00                                               | 8,182.00                     | 3,970.00                  |
| March-2021     | -5,699.00                                              | 20,250.00                    | 25,949.00                 |
| February-2021  | -1,219.00                                              | 23,352.00                    | 24,571.00                 |
| January-2021   | 2,854.00                                               | 18,225.00                    | 15,371.00                 |
| December-2020  | 3,991.00                                               | 10,014.00                    | 6,023.00                  |
| November-2020  | 10,261.00                                              | 14,289.00                    | 4,028.00                  |
| October-2020   | 15,640.00                                              | 15,640.00                    | 0.00                      |
| September-2020 | 8,172.00                                               | 13,322.00                    | 5,150.00                  |
| August-2020    | 5,307.00                                               | 8,524.00                     | 3,217.00                  |
| July-2020      | 15,973.00                                              | 16,903.00                    | 930.00                    |
| Total          | 94,919.00                                              | 2,04,813.00                  | 1,09,894.00               |