Question 2Critically examineGS3GS3

The Reserve Bank of India's surplus transfers offer the government much-needed fiscal space, yet they are not without challenges. Critically examine the implications of the RBI's surplus transfers to the government. (Answer in 150 words)

Introduction

RBI, as the uber within rules, RBI Act, transfers its surplus buffer amount to government of India

17 words

Main Body

RBI, as the uber within rules, RBI Act, transfers its surplus buffer amount to government of India - when makes a savanna income source for government. Surplus source: Profit from printing money Arbitrage and Profit from lending to commercial banks. Gives govt fiscal space. i Adds to government resourcesBreadth of economy. ii Fiscal stimulus for welfare projects. iii Balance fiscal deficit and CAD with reserves. iv Capital expenditure (= LLI taken crore)adds favoring as debt already 92.7% of GDP. Challenges with surplus transfer: i No fixed annuement - differs every year as per economic vicissitudes. ii Unaccounted money - slack of oversight & plurality by parliament. iii Reduces the fiscal autonomy of RBI - 'dependent'. iv Fiscal transparency - Public money (ackR7).

126 words1 paragraphs

Conclusion

Dedicated rules under RBI Act needs also be overhauled for greater transparency and accountability.

14 words

Diagram

Flowchart showing RBI surplus transfer mechanism with branches for: Sources of surplus (Profit from printing money/Arbitrage, Profit from lending to commercial banks), Benefits (Adds to government resources, Fiscal stimulus for welfare, Balance fiscal deficit), and Challenges (No fixed amount, Unaccounted money, Reduces RBI autonomy, Fiscal transparency issues).

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Page 7

Topper

Deeksha Chourasiya

AIR 44

Subject & Paper

GS3GS3

Topic

Economic Development

Mobilisation of Resources

RBI surplus transfers and fiscal implications

Writing Stats

157

Total words

Paragraphs

analytical

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