RBI to cut fiscal deficit to 4.2% of GDP: SBI

A recent report by the State Bank of India (SBI) suggests that the central government's fiscal deficit could decline from the budgeted level of 4.5 per cent of GDP to 4.2 per cent, thanks to a substantial dividend transfer from the Reserve Bank of India (RBI).

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The Union Budget for 2025-26 had anticipated a dividend income of Rs 2.56 lakh crore from the RBI and public sector financial institutions. However, with recent transfers, actual revenue is expected to surpass these projections. This additional funding provides the government with greater fiscal flexi