Government should use RBI funds in a prudent manner

Government should use RBI funds in a prudent manner

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Reserve Bank of India
It is morally unacceptable that any one government can swallow even a part of such funds to help meet its expenditure in a particular year.
After a long tug (खींचातानी)of war, the government has eventually(अंत में) had its way with the Reserve Bank of India, managing to get it to part with a portion(हिस्सा) of its accumulated(जमा हुआ/संचित ) reserves(भंडार/रोक). The RBI board, on Monday, decided to transfer a massive(बड़े पैमाने पर) ₹1,76,051 crore to the government, including(सहित) a sum of ₹52,637 crore from its contingency(आकस्मिकता/हालत ) reserve built(बनाना) over the last several(कई ) years. The outflow from the RBI’s reserves was limited to this amount only because the Bimal Jalan Committee, appointed to recommend(सिफारिश) the economic(आर्थिक ) capital(पूंजी ) framework(पूंजी ) for the RBI, decided to keep a major(प्रमुख) part of the reserves locked up and out of the reach of the government while opening up the remainder(शेष) with strict(सख्त ) stipulations(नियम/शर्तों). The Committee has recommended, and rightly so, that the Currency and Gold Revaluation(पुनर्मूल्यांकन) Reserve Account (₹6.91 lakh crore as of June 30, 2018), at least half of which was eyed by the government, represents(प्रतिनिधित्व ) unrealised(अवास्तविक ) gains(लाभ ) and hence(इस वजह से) is not distributable(बांटने योग्य) to the government. In the case of the Contingency(आकस्मिक ) Reserve (built out of retained(प्रतिधारित ) earnings(कमाई)}, which was ₹2.32 lakh crore as of the same date, the committee said that it should be maintained(बनाए रखा) within a band of 6.5-5.5% of total assets(संपत्ति). It left it to the RBI board to decide(निर्णय ) the precise(ठीक/सटीक ) percentage it was comfortable(आरामदायक) within this band and transfer the excess to the government. As it happened, the board, in its Monday meeting, decided to peg this ratio(अनुपात) at 5.5% thus enabling(सक्षम ) it to transfer a sum of ₹52,637 crore to the government immediately. The committee should also be complimented for clearly specifying(निर्दिष्ट करने/शर्त रखना) that the revaluation reserve cannot be used to bridge shortfalls in other reserves.

In principle, it could be argued that the government as sovereign(राज/संप्रभु ) owns the RBI and hence there is nothing wrong if it decides to tap the central bank’s reserves. Yet, that it actually chose to do so is unfortunate(दुर्भाग्यपूर्ण ) because these reserves represent “inter-generational(अंतर-पीढ़ी) equity built up over several years by the RBI by squirrelling away a part of its annual surplus(अधिशेष ). It is morally(नैतिक रूप से ) unacceptable(अस्वीकार्य ) that any one government can swallow even a part of such funds to help meet its expenditure(खर्च) in a particular year. The reserves, as the Jalan Committee has pointed out, represent the country’s savings for a ‘rainy day’, which is a monetary(मौद्रिक ) or financial(वित्तीय ) crisis(संकट). Interestingly(दिलचस्पी से/शौक से ), the net surplus of ₹1,23,414 crore posted by the RBI in 2018-19 is more than double that of the previous year and is considerably(काफी ) higher than the ₹65,876 crore that it netted in 2015-16. Only the release of the RBI’s Annual Report in the next few days will help in the understanding of the reasons behind the sharp(तेज) jump in the surplus. The big transfer from the RBI will free up the hands of the government at a time when tax revenues are undershooting the target by a long chalk. The money, it is hoped, will be put to use in a prudent(विवेकपूर्ण ) manner(तरीके से।).

Important Vocabulary

1. Accumulated(जमा हुआ/संचित
Synonyms: accrue, acquire, add to, assemble, collect
Antonyms: contract, decrease, diminish, disperse, divide

2. Assets(संपत्ति)
Synonyms: belongings, capital, credit, equity, estate
Antonyms: debt, liabilities

3. Crisis(संकट).
Synonyms: catastrophe, change, confrontation, crunch, deadlock
Antonyms: agreement, benefit, blessing, breakthrough, calm

4. Comfortable(आरामदायक)
Synonyms: appropriate, complacent, convenient, cozy, easy
Antonyms: cold, cool, disagreeable, dissatisfied, hard

5. Considerably(काफी
Synonyms: appreciably, far, greatly, markedly, noticeably
Antonyms: insignificantly, little, slightly, inappreciably, unremarkable

6. Contingency(आकस्मिकता/हालत )
Synonyms: emergency, eventuality, exigency, probability, accident
Antonyms: improbability, unlikelihood, advantage, bad luck, certainty

7. Massive(बड़े पैमाने पर)
Synonyms: big, colossal, enormous, extensive, gargantuan
Antonyms: common, dwarfed, inconsequential, insignificant, limited

8. Prudent(विवेकपूर्ण
Synonyms: careful, cautious, discreet, economical, frugal
Antonyms: careless, expensive, foolish, hasty, inattentive

9. Portion(हिस्सा
Synonyms: allocation, chunk, excerpt, fraction, fragment
Antonyms: entirety, total, whole, agreement, peace

10. Retained(प्रतिधारित
Synonyms: maintained, received, saved, confined, contained
Antonyms: extroverted, lost, outgoing, disengaged, let go

11. Stipulations(नियम/शर्तों)
Synonyms: arrangement, clause, obligation, precondition, provision
Antonyms: disagreement, implication, request, wish

12. Surplus(अधिशेष
Synonyms: excess, leftover, unused, over, spare
Antonyms: essential, lacking, necessary, needing, wanting

13. Sovereign(राज/संप्रभु
Synonyms: absolute, autonomous, unlimited, ascendant, chief
Antonyms: dependent, limited, restricted, minor, secondary

14. Tug (खींचातानी
Synonyms: drag, draw, haul, heave, jerk.

 


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