Dividend demand on PSUs

North Block asks for payouts in advance.

In a move to raise resources to meet the deficit targets this fiscal year, the finance ministry has asked all public sector units in infrastructure-related sectors to pay 10 per cent of the next year's projected dividend this fiscal year itself.

This is in addition to the 30 per cent dividend these companies have been asked to pay during the current fiscal year. Public sector units in power, petroleum and telecom sectors would have to dish out this dividend, to partly make up for the shortfall on account of a lower payout by the Reserve Bank of India (RBI).

The RBI's transfer of surplus profit this fiscal, is expected to be lower by Rs 3,000 crore, pulling down the government's dividend receipts.

In the third quarter of the current fiscal year, the government had asked PSUs to pay up interim dividend. It has now followed it up with a fresh missive.

Since the first set of instructions, the boards of oil companies like Oil and Natural Gas Corporation and Indian Oil Corporation and other PSUs like Bhel and Bharat Sanchar Nigam Ltd have already cleared proposals for interim dividend.

So far, the government has mopped up around Rs 2,800 crore through interim dividend, which is close to last year's level.

The Centre's mop-up of interim dividend was expected to improve by the end of the month as some of the payments made by the companies had not been entered in the government's books.

The government had budgeted for Rs 18,875 crore dividend receipts during the current fiscal year. Of this, Rs 12,978 crore was to come from public sector companies and the remaining, around Rs 5,900 crore, from the surplus profit of the RBI, nationalised banks and financial institutions.

The government is facing a huge shortfall in revenue this fiscal year on account of lower than expected collection of corporation tax and excise duty.

In order to make up for it, it has also lined up a list of public offers in public sector enterprises. However, there are doubts on whether they can be completed this fiscal year.

The finance ministry is lining up the sale of government stake in Balco, Maruti Udyog, Bhel, Power Grid Corporation and Power Finance Corporation.

In addition, it is hoping to generate Rs 1,000 crore through the sale of a part of its stake in Punjab National Bank. The ministry is confident of surpassing the Rs 4,000 crore target set for the fiscal.

As per the Fiscal Responsibility and Budget Management Bill, the government has to reduce fiscal deficit to 4.1 per cent of the gross domestic product and revenue deficit to 2 per cent.