The government is expecting better dividend receipts from the state-owned companies, even as these firms have expressed their inability to increase payouts in view of future business needs.
"The meetings (with PSUs) are going good. I hope we will be getting some good amount (of dividend). Effort is on," economic affairs secretary R Gopalan told reporters here.
Pressed hard for funds, Gopalan has been meeting the heads of public sector undertakings (PSUs) to persuade them to increase dividend payment to the government. “We are conscious of the fact that they also need resources for their own financing programme. They also understand our need. Therefore, in the spirit of cooperation we are trying to see how our needs can be met in consistent with our requirement," Gopalan said. At the meetings held in the finance ministry earlier this week, PSU chiefs in sectors like steel, coal, mines, power and oil have said they would retain the dividend paid last year as paying out of their cash reserve would hinder their expansion plans. Besides, oil companies said that the final dividend would be decided after assessing the under-recoveries and subsidy provided by the government.
The government is seeking higher dividends from PSUs to tide over the financial problem which got aggravated because of rising subsidy Bill and slow progress on the disinvestment front.
The finance ministry has already discussed the issue with PSUs like SAIL, Nalco, PFC, REC, ONGC, IOC and Oil India among others.
While the subsidy Bill during the current financial year is expected to shoot up by an additional Rs one lakh crore, the government is unlikely to meet the disinvestment target of Rs 40,000 crore.
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The government has already announced borrowing an additional Rs 90,000 crore to bridge the revenue-expenditure gap.
There are apprehensions that the Centre's financial year deficit -- the gap between an overall revenue and expenditure -- is likely to exceed the Budget estimate of 4.6 per cent of GDP in this financial year. Under the existing norms, profit-making PSUs are required to declare a dividend of at least 20 per cent of the government's equity investment, or 20 per cent of post-tax profit, whichever is higher. In the case of oil, petroleum, chemicals and other infrastructure industries, the pay-out has to be at least 30 per cent of post-tax profits.