Robust RBI dividend revenue, disinvestment proceeds to manage fiscal pressures in FY27

New Delhi: Robust revenue from RBI dividend transfers, improving disinvestment proceeds and sustained growth in capital expenditure are expected to help the Centre manage fiscal pressures in FY27, a report showed on Tuesday.

A report by CareEdge Ratings noted that strong collections from GST and customs duties are expected to continue supporting tax revenues.

Although income tax and excise duty collections may fall short of projections, higher dividends and asset monetisation receipts are likely to cushion the impact, it added.

The report highlighted significant progress in the government's disinvestment programme.

With the proposed IDBI Bank stake sale and ongoing asset monetisation initiatives, total proceeds are expected to reach around Rs 1 lakh crore.

Another key source of support has been the Reserve Bank of India's surplus transfer.

According to the report, strong dividend payouts from the RBI in recent years have created additional fiscal space for the government with dividend receipts expected to marginally exceed budget estimates in FY27.

The report also underscored the government's continued emphasis on infrastructure creation.

Capital expenditure rose 12.7 per cent in the first half of FY27 led by spending on railways and highways.

Excluding food distribution-related expenditure, capital spending registered an even stronger 14 per cent growth.

In addition, capital transfers to states increased substantially, reflecting higher allocations under investment-support schemes aimed at boosting infrastructure development across the country.

According to CareEdge, the Centre can also draw on the Rs 1 lakh crore Economic Stabilisation Fund, if required to maintain its fiscal deficit target.

Moreover, the report does not expect any additional pressure on government borrowing during the current financial year.

The report suggests that despite near-term fiscal challenges, India's public finances continue to benefit from strong institutional buffers, resilient revenue streams and sustained infrastructure-led growth.