All about borrowing.

"The Reserve Bank of India (RBI) is aware of near-term risks to the Indian economy," HT. But, "The Indian economy and the financial system, in contrast, remain robust and resilient supported by strong growth, healthy balance sheets of financial and non-financial firms, sizeable buffers and prudent policy reforms," said RBI Governor Sanjay Malhotra. "Bad loans are at a multi-decade low," but credit growth at non-banking financial companies (NBFC) was higher than "that of banks in all segments except in agriculture and allied activities." NBFCs borrow from commercial banks (72.9% last September) and are "not as closely regulated as banks" so defaults at NBFCs could have a knock-on effect on banks. Mint. But what about the government's bank, the RBI? This year's Budget will show how much dividend the government expects from the RBI. The 2025 Budget Estimate was Rs 2.34 trillion from the RBI and public sector banks. CNBC. In the event, the RBI transferred a record Rs 2.68 trillion (newsonair.gov.in), helping to keep the fiscal deficit under control. The RBI transferred Rs 874.16 billion in FY23 and more than doubled it to Rs 2.11 trillion in FY24. Already, "India's fiscal deficit for April to November, or the first eight months of this fiscal year, was at Rs 9.76 trillion, equivalent to 62.3% of annual estimates, widening from the previous year's 52.5%. The government aims to narrow the fiscal gap to 4.4% of GDP in this financial year from 4.8% a year earlier." ET. Monetization of the fiscal deficit "occurs when the government finances itself by issuing non-interest-bearing liabilities: that is, either currency in circulation of central banks reserves, if the central bank can avoid paying interest on those reserves." some.yale.edu. Income Tax rebate was increased from Rs 25,000 to Rs 60,000 this year and, in addition, the standard deduction for salaried workers has been increased to Rs 75,000. Bajaj Finserve. Also, the goods and services tax (GST) rates have been simplified and rates reduced on a range of items. cleartax.in. "India's goods and services tax (GST) collections reached Rs 1.75 trillion ($19.45 billion) in December, up 6.1% from the same month last year, the government said." ET. It may be up year-on-year but it is much lower than Rs 2.10 trillion in April 2024 and Rs 2.36 trillion in April 2025. Tata Nexarc. This may partly be because the consumer price inflation (CPI) inflation collapsed to just 0.7% in November after 0.3% in October. rateinflation.com. "India's household debt rose to 41.3% of GDP at the end of March 2025," "up from a five-year average of 38.3%". Borrowing for consumption is 55.3% of total household borrowing from financial institutions as of September 2025. ET. Naturally, "India's manufacturing sector expansion slowed to its weakest in two years in December as demand softened and firms curbed production...hiring has slowed to a near standstill." Reuters. Less consumption means less GST and a fall in hiring means less income tax. So, how much will the RBI pay the government? An indication in the dreaded Budget.