Context: Why This Matters
The RBI is a creation of Parliament, and any surplus it returns must be used with intention and integrity. According to the Preamble of the Indian Constitution, the Republic must secure Justice – social, economic, and political – and the Dignity of the Individual.
In that spirit, the dividend must be:
– Used only for economic purposes.
– Kept out of the general expenditure budget.
– Focused on sustainability, corrections, and corrective actions.
The central idea:
Empower India’s economy from within, reduce external dependency, and honour India’s savings and institutions.
Key Proposals at a Glance
Capitalising Indian Financial Institutions:
– Capitalise 100% Central Government-owned financial institutions through Equity Shares, Preference Shares, and Long-Term Bonds.
– Recognise these as Sovereign Special Purpose Vehicles with clearly defined mandates.
Reaffirming Sovereignty in Currency and Borrowing:
– Clearly declare a list of institutions under Central Government ownership with RBI concurrence.
– Mobilise internal savings and eliminate dependence on foreign currency sovereign loans.
Five National Resolutions
Resolution 1: No More Sovereign Borrowing in Foreign Currency
India need not borrow externally. The Indian Rupee, powered by domestic savings and institutional integrity, can support all State functions and capital investments.
Resolution 2: Prepayment of Multilateral Borrowings
India should repay existing multilateral loans – ahead of schedule, by November 2026.
Outcome:
– Exit future borrowing from the World Bank, ADB, etc.
– Let RBI make rupee provisions and allow specialised institutions to finance Indian projects in Indian currency.
Resolution 3: A Strategic Investment Framework
– Let Indian banks and financial institutions invest part of their financial assets in global securities.
– Propose:
– SLR to 22%
– 6% to be invested in Multilateral Agency Bonds (in collaboration with RBI and the Ministry of Economic Affairs).
Resolution 4: Capital Account Convertibility for National Entities
– Expand Current Account transactions in all currencies.
– Empower public banks and Indian financial entities to handle capital account convertibility under government guidance.
Resolution 5: A Financial Services SEZ Cluster
– Establish a Special Economic Financial Cluster under RBI & SEZ Acts.
– Locations: Ladakh, Goa, Tiruchirappalli, Bhubaneswar, Bhopal, Mangalore, Chandigarh.
– Impose strict capital convertibility regulations to protect Indian interests.
India’s Debt Position (Estimated)
As of March 2025: ₹181.74 lakh crore
As of March 2026: ₹196.78 lakh crore
Message: India must handle its finances internally. It can. It should.
As of April 4, 2025:
Foreign Exchange & Reserve Strategy
– Forex Reserves: $676 billion
– External Sovereign Debt: ~₹6.18 lakh crore
Proposed:
– Prepay all external borrowings.
– Start purchasing World Bank or equivalent securities with our reserves.
– Convert RBI’s holdings of US Treasuries into development securities.
– Avoid complex FX hedging by focusing on early repayments and rupee-based asset management.
Regulatory Actions: CRR and SLR
– CRR Reduction: Reduce to 3%.
– SLR Increase: Raise to 22% to absorb and reallocate surplus liquidity meaningfully.
Strategic and Policy Coordination
To succeed:
– Ministry of Economic Affairs and RBI must stay in sync.
– Public messaging from key offices (PMO, Cabinet Secretariat, DEA) must be clear and consistent.
– Parliamentary approval and transparent debates may be required for legitimacy.
Capital Account Convertibility – India’s Next Step
This plan is a measured path toward Capital Account Convertibility, echoing the vision of:
– Dr. Manmohan Singh
– Dr. C. Rangarajan
– Dr. Bimal Jalan
– Dr. Y.V. Reddy
– Dr. Subbarao
– Dr. Raghuram Rajan
This also gives partial implementation to the Tarapore Committee Reports I & II.
Conclusion: Towards a Sovereign Economic Future
India does not need to chase global credit ratings when it does not borrow externally.
The world needs India as a banker to the world, not merely a borrower.
This is the moment. Let the Rupee rise. Let India lead.
References
1. Tarapore Committee Report I & II
2. Budget Papers – https://budget.nic.in
3. RBI Bulletins and Publications by Former Governors
4. Contemporary Financial News and Anal
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The above suggestions were sent to the RBI and various other dignitaries on 2nd June 2025
