Will be unpalatable.

  "The Reserve Bank (RBI)...announced a record Rs 2.69 trillion dividend to the government for FY25, helping the exchequer to tide over challenges posed by US tariffs and increased spending on defence due to the conflict with Pakistan." The payout has soared from Rs 874.16 billion in 2022-23 to Rs 2.1 trillion last year and Rs 2.69 trillion this year. "The Contingency Risk Buffer (CRB) has been hiked to 7.50% from the previous 6.50%," to help "cover potential hits like bad loans, falling asset values, staff costs and surprise economic shocks." ET. "RBI's goal is public good, not profit." It profits from interest on lending to banks, from seigniorage, because the face value of banknotes is much higher than the cost of printing (Investopedia) and a weaker rupee, as it controls volatility by buying and selling foreign exchange. "The record revenues through dividend and GST have led the markets to believe that there will be a sharp drop in government borrowing." TOI. Yields on the 10-year bond have dropped to 6.252%. Trading Economics. In addition to a huge cash transfer to the government, the RBI has cut interest rates by 50 basis points (bps) to 6% this year  (ET) and "is expected to cut at least by a similar quantum in the coming months, with Nomura expecting another 100 bps of cuts in 2025 (Reuters). In addition, "The RBI has pumped around $100 billion into the banking system over the past six months, the largest amount ever for such a period, using methods such as easing the cash reserve ratio, secondary market debt purchases, foreign exchange swaps, and aggressive open market operations." "In FY25 (April 2024-March 2025), RBI purchased bonds worth Rs 2.6 trillion, while this fiscal year it has purchased Rs 1.2 trillion of bonds and plans to buy another Rs 1.3 trillion this May." ET. All this frenetic activity activity is designed to help the government by reducing the fiscal deficit, which means government borrowing, and the interest rate, which reduces the cost of borrowing. "The massive transfer far exceeds the Rs 2.56 trillion that finance minister Nirmala Sitharaman has announced from RBI and public sector financial institutions combined," and will cut fiscal deficit by 20-30 bps. TOI. "India's bond yield premium over the US has narrowed to its smallest in two decades, likely risking outflows from local debt." Mint. Is that why the CRB has been hiked to 7.5% in case there is a sell off in bonds by foreign funds leading to a precipitous drop in prices? The RBI is said to have gained by selling dollars bought earlier at lower prices. In 2014, one dollar bought Rs 60.95 (worldtradescanner.com) while $1 converts to Rs 85.67 today (xe.com). That should result in large gains by selling dollars. But India's foreign exchange reserves were $304.224 billion in 2014 (Databook) and forex reserves fell by $4.888 billion to $685.729 billion as on 23 May (ET). If the RBI has more than doubled its forex reserves by buying more than selling, how is it making profits on dollar sales? So is the RBI monetizing government debt (wikipedia) which is considered to be very risky for the economy? Using fancy terms and elaborate plays to make it palatable. We may end up paying. After all, it's gambling with our money.