The RBI (Reserve Bank of India) transferred only Rs 30,659 crore as dividend to the government for the year ended June 2017, this is 50% less than previous year's levels.

Last year, RBI transferred Rs 65,876 crore to the government. This year, the expectation of BJP government and demonetisation supporters was more than one lakh crores will flow into the government exchequer, due to the demonetisation gains.

But, this didn’t happen for below reasons :

1) Radhika Rao, economist at Singapore-based DBS bank, points out in her note that demonetisation added to the RBI’s cost burden through additional printing and destruction (of scrapped notes) costs.

2) Surplus domestic liquidity has forced the RBI needs to pay interest on this money to banks in contrast to liquidity being in deficit in prior two years, which saw banks borrow from the RBI and add to latter’s earnings.

3) Lower returns on foreign reserves in midst of weak global yields.

With this dividends fall by 50% it is written on the wall that demonetisation has turned out to be a huge deficit to the Modi's government’s earnings from RBI.

The problem did not stop here but the poor dividend could make it even tougher for the government to meet its fiscal deficit target of 3.2 percent of gross domestic product for the year ending in March.