With the code of conduct for the upcoming general election likely to kick in during the period between late February and early March, intense pressure is being mounted on the Reserve Bank of India (RBI) and its new Governor Shaktikanta Das to part with a portion of its profits to enable government spending on schemes that would, in turn, help garner voter support.
According to sources, the government's demands on the Reserve Bank India come in the face of a ballooning fiscal deficit and the need to boost the economy in an election year.
With GST collections this year regularly falling short of the monthly target of Rs. 1 lakh crore, a Bank of America Merrill Lynch report last week said the Centre is likely TO breach the fiscal deficit target once again by 40 basis points for 2018-19, and raise the target for the next fiscal to 3.5 per cent.
Much Pressure On RBI To Part With Reserves Ahead Of General Elections: Report