Dividends from CPSEs: Two things that have given comfort to the government on the fiscal front are direct tax collection, more than budgeted dividends from RBI and Public Sector Enterprises. Going ahead in FY25, ICRA expects robust dividends from RBI and CPSEs. Overall, ICRA has placed the target for dividends and profits at a healthy Rs 1.2 trillion for FY25. However, this would be less than Rs 1.4-1.5 trillion expected for FY24. The robust and more than-budgeted dividend was largely driven by higher RBI surplus transfer. 

“The dividends from PSEs may remain healthy in FY2025, as is the case in the ongoing fiscal (Rs. 439.7 billion as of Jan 11, 2024, as per DIPAM data vs. FY2024 BE of Rs. 430 billion),” ICRA in its pre-budget memorandum said. 

According to ICRA, the RBI is likely to have earned its net interest income under LAF/MSF operations in FY2024 after reporting a net outgo in FY2023, with net liquidity turning into deficit mode since mid-Sep 2023. 

However, the amount of G-secs held by RBI has reduced at end-Sep 2023 from end-March 2023 levels, which may have eased interest income on such account, while the exchange gain from forex transactions is estimated to have tempered from FY2023, amid net forex purchases in the ongoing fiscal so far (up to Oct 2023).