For Quick Alerts
For Daily Alerts

FinMin seeks dividend from PSUs to meet fiscal deficit target

By Super

FinMin seeks dividend from PSUs tomeet fiscal deficit target
New Delhi: In order to stick to its fiscal deficit target, the Finance Ministry will seek special dividend from profit making public sector entities to rake in around Rs 30,000 crore for the exchequer. "We will meet heads of central public sector entities in January. We will seek special dividend from the PSU which has not utilised its capex drawn for the current fiscal," a senior Finance Ministry official told PTI

In the 2013-14 budget, the government has estimated to garner Rs 29,870 crore as dividend from PSUs. Further, Rs 43,996 crore is estimated to flow in from PSU banks and Reserve Bank of India under the same head. "We have budgeted Rs 73,866 crore. We will achieve it," the official added. In the last fiscal, the government had originally budgeted a dividend income of Rs 27,178 crore from PSUs. However, this went up to Rs 29,996 crore in the revised estimates as companies paid higher dividend on demand from the Finance Ministry. In order to boost industrial production, Finance Ministry has been pressing all the public sector entities to make investment as per their capex plan for the current fiscal.

The Finance Ministry believes dividend from CPSUs is a return on investment made by the government and it should be commensurate with profits. "Only after third quarter numbers, companies financial position can be assessed and on that basis dividend can be sought," the official added. Last fiscal, the government received Rs 55,443 crore as dividend and profit. Presently, all profit-making central public sector undertakings (CPSU) are required to declare a minimum dividend on equity of 20 per cent or a minimum dividend payout of 20 per cent of post-tax profit, whichever is higher, subject to availability of disposable profits. The Finance Ministry said in the case of PSUs with large disposable profits or healthy cash reserves, a higher or special dividend may also be considered.


However, for the 14 PSUs in the oil sector, including Oil & Natural Gas Corp, Indian Oil and GAIL India, the Petroleum ministry has sought a 30 per cent dividend. ONGC, GAIL India and Oil India have declared 30 per cent dividend for the past few years. Government is banking on dividend mop up to keep its fiscal budget on track. With less non-tax revenues in kitty, the fiscal deficit has already touched 76 per cent of budget estimates in the April-September period. Government aims to contain fiscal deficit at 4.8 per cent of GDP in the current fiscal.


Story first published: Thursday, November 28, 2013, 15:55 [IST]
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more