The Bimal Jalan Committee, on reviewing the Reserve Bank of India's (RBI) extant economic capital framework, has recommended the alignment of the financial year of RBI (July to June) with the fiscal year of the Government (April to March) from the financial year 2020-21.
By doing so, the Committee reasoned that the RBI would be able to provide better estimates of the projected surplus transfers to the Government for the financial year for budgeting purposes.
Further, it could reduce the need for an interim dividend being paid by the RBI. The payment of interim dividend may then be restricted to extraordinary circumstances. The practice of paying interim dividend commenced in 2016–17.
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The alignment of RBI's financial year with that the Government would obviate any timing considerations that may enter into the selection of open market operations (OMO)/ Market Stabilization Scheme (MSS) as monetary policy tools. It would also bring about a greater cohesiveness in the monetary policy projections and reports published by the RBI which mostly use the fiscal year as the base.