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In order to stick to its fiscal deficit target, the finance ministry will seek a 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 public sector undertakings (PSUs) which have not utilised its capex drawn for the current fiscal,” a senior ministry official said.
“In the 2013-14 Budget, the government had estimated it would 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 said.
In the last financial year, 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, the ministry has been pressing all PSUs to make investments according to their capex plan for the current financial year. It believes dividend from central public sector undertakings (CPSUs) is a return on investment made by the government and it should be commensurate with profits.
“Only after the third quarter numbers, companies’ financial position can be assessed and on that basis dividend can be sought,” the official added.
In the last financial year , the government received Rs 55,443 crore as dividend and profit. Currently, all profit-making CPSUs are required to declare dividend on equity of at least 20 per cent or a dividend payout of at least 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. The government is banking on dividend mop up to keep the 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 the fiscal deficit at 4.8 per cent of gross domestic product in the current financial year.
