SAIL may retain dividend payment to government at Rs 700 crore

The Steel Authority of India (SAIL) may pay Rs 700 crore as dividend to the government in the current financial year, the same as last year, reflecting subdued conditions of the steel market.
"This year, the dividend payment to the government will be the same as that of the last year at Rs 700 crore. However, it can go up if the Finance Ministry asks for any special dividend," a source said.
Higher dividend from public sector undertakings would partly make up the shortfall from disinvestment and lower receipts in other heads of accounts due to slowing economic growth as the finance ministry seeks to keep the fiscal deficit within the budgetary target of 4.8 per cent of GDP.

Finance Minister P Chidambaram has said that the government will not accept less dividend than what it received from PSUs during the previous financial year.
Dividend paid to the government by the country's largest steel maker, which is 80 per cent state owned, has come down from Rs 850.73 crore in 2010-11 to Rs 708.93 crore in 2011-12 and Rs 700 crore in the previous financial year.
The lower payouts are in line with the gradual decline in SAIL's net profit from Rs 4,904.74 crore in 2010-11 to Rs 3,542.72 crore in 2011-12 and Rs 2,170.35 crore in 2012-13.

SAIL may find it difficult to pay higher dividend as the steel market is subdued and margins have been squeezed. India's steel demand rose 0.5 per cent during April-December on slowing economic growth.

Wage revisions for 85,000 non-executives, due since 2012, may also hold SAIL back from paying higher dividend.
The company clocked a 32 per cent increase in profit after tax at Rs 1,631 crore in the first half of the current financial year, the source said.
During the October-December quarter, SAIL's total sales of steel were up 6 per cent at 2.98 million tonnes.