Chandigarh, May 23: The financial independence and long-term economic firefighting capabilities of the Reserve Bank of India could be compromised by the Union Government’s extraction of a record-breaking ₹2.87 lakh crore dividend, Punjab Finance Minister Harpal Singh Cheema affirmed Friday.
Addressing the historic transfer of funds, Cheema noted that the sum is among the highest ever delivered to a sitting government since the central bank was established. The minister argued that the money, drawn from a total income of approximately ₹4 lakh crore, should be utilized to support state governments facing identical economic hardships, including supply shocks and high fuel prices.
According to the established framework, these specific windfall gains are kept outside the standard tax pool that the central government shares with individual states, a policy Cheema insisted runs contrary to cooperative federalism.
“Extraordinary gains of this nature should be shared with the states in the spirit of cooperative federalism and fiscal fairness,” Cheema stated.
The narrative surrounding the transfer centers on the balance between fixing the federal deficit and preserving national economic immunity. Cheema declared that the central bank serves as the country’s primary economic shock absorber and monetary stabilizer, meaning any reduction in its policy flexibility leaves the entire nation vulnerable.
He further noted that a volatile global financial environment makes it essential for the institution to retain a stronger financial buffer rather than depleting its reserves.
“The central bank must preserve adequate reserves and policy flexibility to safeguard financial stability,” Cheema asserted, adding that a weakened financial heart threatens the entire country’s aspirations. “India cannot aspire to build a strong and resilient economy with a weakened central bank.”
