Punjab Finance Minister Harpal Singh Cheema on Friday asked the Union government to share the Reserve Bank of India’s record surplus transfer with states, saying such receipts should be viewed through the principles of cooperative federalism and fiscal fairness.
In a statement issued in Chandigarh on May 23, Cheema raised concerns over the transfer of nearly ₹2.87 lakh crore from the RBI to the Centre for the accounting year 2025-26. He said the amount was among the highest surplus transfers made by the central bank and called for a wider discussion on how such gains are used at a time when states are also dealing with fiscal pressures.
Cheema said the transfer raised three key questions, including whether extraordinary gains received by the Union government should remain outside the pool of resources shared with states. “If the Union government is facing economic pressures due to global uncertainties and supply shocks, the states are facing the same challenges. Extraordinary gains of this nature should be shared with the states in the spirit of cooperative federalism and fiscal fairness,” he said.
The Finance Minister said states were dealing with the fiscal impact of inflation, higher input costs and welfare commitments, and therefore deserved a share in large non-tax receipts of this nature. He said the present arrangement gave the Centre a fiscal cushion even as states faced similar economic pressures without a corresponding benefit.
Cheema also cautioned against any approach that could reduce the central bank’s ability to respond to economic shocks. “While reducing the fiscal deficit is important, it must not come at the cost of weakening the financial strength and institutional firepower of the Reserve Bank of India,” he said.
He described the RBI as an institution that plays a key role in monetary stability and crisis management. “RBI serves as the nation’s economic shock absorber and monetary stabilizer during periods of crisis. Excessive extraction of reserves may weaken the long-term resilience and economic immunity of the country,” Cheema said.
The remarks came after the RBI’s Central Board approved the transfer of a surplus of about ₹2.86 lakh crore to the Central government for 2025-26. The central bank said its gross income had increased during the year and that its balance sheet had expanded. It also said it would transfer about ₹1.09 lakh crore towards the Contingent Risk Buffer while maintaining the buffer at 6.5 per cent of the RBI balance sheet under the revised Economic Capital Framework.
Cheema said that in the current global and financial environment, the RBI should retain adequate reserves and policy flexibility to safeguard financial stability. He urged the RBI leadership to ensure that the institution’s independence and long-term credibility remained protected.
“I urge the RBI Governor to ensure that the institutional independence, strength and long-term credibility of the Reserve Bank of India remain paramount. India cannot aspire to build a strong and resilient economy with a weakened central bank,” he said.
There was no immediate official response from the Union government or the BJP to Cheema’s remarks at the time of publication.
The issue has revived the broader debate over surplus transfers from the central bank to the Union government, particularly when states have repeatedly sought greater fiscal space for welfare spending, infrastructure and debt management. Cheema said the Centre should consider a framework under which extraordinary gains of this scale are shared in a way that reflects the fiscal responsibilities of both the Union and the states.
