RBI Transfers 1.76 Lakh Crore to the Government

The recessing global economy and India's slip from 5th to 7th fastest growing economy is a major irritant for the Indian economy. The liquidity crisis is deteriorating public sector and needs a push which now seems possible after the Bimal Jalan's committee reports and RBIs compliance to transfer the surplus amount to government. The decision is being criticized by economists, speculated that, Urjit Patel, the former president of RBI, resigned due to pressure from the government.

The package from RBI might turn out to be a big relief as Indian government can channelize this money on:

Reviving the Public sectors of India
Injecting the much-needed liquidity in market
Providing better infrastructure
Assisting to recover the automobile sector in India which has been hit the hardest by slowing down of economy

If political clout is left behind and this money is facilitated in a way to regulate the economy and overcome the crisis that we're witnessing, this money transfer from RBI would be much appreciated. However, the other notion suggests that government might put this money into social schemes which might not be as pragmatic as our govt plans to hit the 5 trillion economy tag. The controversies and speculations would be unfolded only as the time passes by. Right now, the economy is struggling to keep up at the pace it used to be and the role of RBIs fund is going to be historical. If done correctly, the economy would once again catch up and will be on the way to grow and prosper.

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