The government’s move to shovel funds out of Sebi’s general fund has mystified observers as the market watchdog isn’t sitting on a huge pile of cash, unlike the Reserve Bank of India.

The annual accounts of Sebi for 2016-17, which is the latest financial statement available in the public domain, shows that its general fund had Rs 3,162.78 crore.

The accounts for 2016-17 were filed in August last year.

The accretion to the general fund in 2016-17 was only Rs 348.45 crore and there is no reason to believe that the annual accretions have gone up substantially in the two subsequent years.

In the Finance Bill for 2019-20, the Modi government said Sebi would have to create a reserve fund, and 25 per cent of the annual surplus of the General Fund in any year shall be credited to such a reserve fund. It added that the amount pumped into this reserve “shall not exceed the total annual expenditure of the preceding two financial years”.

After meeting all these expenses and the transfer of money to the Reserve Fund, “the surplus of the General Fund shall be transferred to the Consolidated Fund of India”, the new Finance Bill said.

Even if there are higher accretions in 2017-18 and 2018-19, it is unlikely that Sebi’s general fund holds more than Rs 5,000 crore. If 25 per cent of this amount is transferred to the Reserve Fund, the cash left in the General Fund will not exceed Rs 3,750 crore.

It is not clear why the Centre is looking to transfer such a measly amount from Sebi to the government’s account.

Sebi chief Ajay Tyagi and the employees’ association of the board have written separately to the PMO seeking a withdrawal of the proposal.