NEW DELHI: The government rejected reports that it’s seeking Rs 3.6 lakh crore from the Reserve Bank of India and said the fiscal situation is comfortable. But it also indicated that it would press for a discussion on how much money the regulator needs to keep as surplus, among the issues that have created a rift between the two sides.“Lot of misinformed speculation is going around in media. Government’s fiscal math is completely on track. There is no proposal to ask RBI to transfer Rs 3.6 (lakh crore) or Rs 1 lakh crore, as speculated,” economic affairs secretary Subhash Chandra Garg tweeted on Friday. “Only proposal under discussion is to fix appropriate economic capital framework of RBI.”This would suggest that, despite the RBI’s resistance, the government wants a framework for deciding the central bank’s capital requirement, which would give clarity on dividend flows to the government. The matter could be raised at the November 19 central bank board meeting.The surplus transfer issue has been a sticking point between the two. The government feels that through transfer to contingency reserves and other funds, the RBI has more than adequate capital.At the end of June 2018, RBI had Rs 2.32 lakh crore in the contingency fund while the Currency and Gold Revaluation Account had Rs 5.3 lakh crore. RBI paid Rs 50,000 crore in dividends to the government after putting aside Rs 14,190 crore for the contingency fund. The government feels the provisions are in excess of what’s required.Deputy governor Viral Acharya had referred to the matter in his October 26 speech, which brought into the open the differences between the Centre and the government.“A thorny ongoing issue on this front has been that of the rules for surplus transfer from the Reserve Bank to the government,” he had said, citing media reports about the government seeking Rs 3.6 lakh crore. The RBI feels it needs a strong balance sheet to meet all contingencies and do its job properly.ET reported earlier this month that the government had raised 12 issues with the central bank under the hitherto unused Section 7 of the RBI Act.One of these was a discussion on the capital framework. ET had reported on November 6 that the government would press for a resolution of the issues raised by it at the board meeting.“Currently, the RBI’s capital needs put its provisioning at 27%, while most central banks have theirs at 14%. Our calculations state that if RBI provisions at 14%, it can free up to Rs 3.6 lakh crore,” a top official said.The other issues raised by the government include a special refinance window for nonbanking finance companies, housing finance companies and mutual funds; easier credit terms for micro, medium and small enterprises; relaxation in the prompt corrective action (PCA) regime for stressed banks; and lower capital requirement for banks.Garg said the government’s budget was under control.“We will end the FY 2018-19 with FD (fiscal deficit) of 3.3%. Government has actually foregone (Rs) 70,000 crore of budgeted market borrowing this year,” he said.The government’s fiscal deficit at the end of September reached 95.3% of the full year estimate for FY19, sparking concerns of a breach of the target of 3.3% of GDP for the year. In FY18, at the end of September, the fiscal deficit had been better at 91.3% of the budget but the government had ended up missing the target of 3.2% of GDP, ending the year at 3.5% of GDP.“Government’s FD in FY 2013-14 was 5.1%. From 2014-15 onwards, government has succeeded in bringing it down substantially,” Garg said.