The report noted that the country has 340,000 adults in the top 1 per cent of global wealth holders, which is a 0.7 per cent share. The report noted that the country has 340,000 adults in the top 1 per cent of global wealth holders, which is a 0.7 per cent share.

The government is expecting a shortfall in collections from estimated dividend from public sector banks, whose profits have been strained by rising non performing assets and increased provisioning due to initiation of NPA resolution against many accounts, official sources said. The government has estimated to receive Rs 74,901.25 crore as dividend/surplus from the RBI, national banks and financial institutions.

With the surplus transfer from the Reserve Bank of India falling short of the target for the current fiscal, the finance ministry is grappling with state-owned banks expressing similar concerns in recent discussions with government officials on the dividend payout, an official said.

In this year’s Union Budget, the finance ministry has pegged dividend collection of Rs 67,529.24 crore from public sector enterprises and other investments. With banks expected to bring in lower dividends, the government is hoping to meet the shortfall from payments from state-owned enterprises. The finance ministry has denied exemption to a slew of state-owned companies from paying dividend or buying back government-held shares saying that they should pay it upfront and fund their long term investments through market borrowing.

The government has pegged total receipts of Rs 1.42 lakh crore from dividends and profits in 2017-18, as against Rs 1.53 lakh crore received in the previous financial year. Dividend from banks and CPSEs are major source of non-tax revenue for the government. The RBI in August announced that it will transfer Rs 30,659 crore as surplus to the government for the year ended June 2017, less than half the amount transferred last year. For the year 2015-16, the RBI board had approved the transfer of surplus amounting to Rs 65,876 crore to the government.

Amid mounting revenue pressures, the government is pushing to meet fiscal deficit target of 3.2 per cent of the Gross Domestic Product by March-end 2018. The revenue pressure and concerns over the government’s ability to meet the deficit aim is being reflected in the bond market, where yield on benchmark 10-year government is still above 7 per cent, an increase of around 35 basis points over recent levels.

“In recent months, G-Sec yield is rising continuously and currently it is hovering around 7.0%, which is around 30-35 bps higher than H1FY18. With government committed to the path of fiscal prudence and Moody’s upgrading India’s sovereign ratings on the back of the structural reforms implemented, the bond markets are surprisingly still not rallying,” SBI Group Chief Economic Adviser Soumya Kanti Ghosh said in a note on Tuesday.

The increase in yield, which leads to higher interest for the government, is expected to push up the Centre’s borrowing costs by around Rs 3200 crore annually, SBI said. Jump in NPAs, tepid credit growth and the need to make higher provisions against credit losses have reduce PSU banks’ profitability. Out of the total 22 PSU banks, as many as eight PSU banks currently have gross non-performing assets (NPAs) above 15 per cent and 14 banks have GNPA of more than 12 per cent.

To improve the health of banks and credit off-take in the economy, the government has announced planed to infuse equity of Rs 2.11 lakh crore, which will comprise Rs 1.35 lakh crore through recapitalisation bonds, Rs 18000 crore through budgetary resources and Rs 58,000 crore through fund raising from the markets.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.