In the balance sheet of the central bank included in the Weekly Supplement to the RBI Bulletin the deposits of the central government have been shown to be Rs 1 billion (Rs 100 crore) in the last few weeks. This is despite the addition of large amounts, by the middle of September, due to advance tax payments. This was not the case during similar periods in the previous financial years. Thus, the data for March 15, 2013, showed the deposits at Rs 450.77 billion (Rs 45,077 crore) reflecting the advance tax payments. But it did not tell the whole story. A part of the deposits was invested in government securities, so much so the cash position of the Centre was underestimated. A Reserve Bank of India (RBI) official said that government's approval was awaited for revealing the full picture. Now it would appear that the situation has taken a contrary turn with the entire cash holdings barring the statutory minimum of Rs 1 billion booked under government securities. The difference in the RBI holdings of securities between September 13, 2013, and August 30, 2013, amounts to Rs 585 billion (Rs 58,500 crore). It may indicate the cash position of the government in the RBI since the last buyback of Rs 6,230 crore was done on August 30, 2013. One does not understand the rationale for keeping the cash holdings camouflaged in the balance sheet, making it difficult for analysts and every stakeholder in the market to understand trends in the economy. This runs counter to what the governor said in his first statement that he would follow the tradition of transparency and predictability.
A Seshan Mumbai
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