The finance ministry is planning to cast its net wider to include all profit-making dividend-paying public sector units (PSUs) for paying special dividends for 2001-02.
While the ministry has already named six oil PSUs to look at their capacity for paying the special dividend, it is now veering round to the view that all profit-making PSUs should also be tapped for special dividend as the government's revenue mobilisation drive is showing signs of faltering.
Tax collections are estimated to miss the Budget target by around Rs 15,000 crore, and the disinvestment process is expected to net only 50 per cent of the targeted Rs 12,000 crore. The disinvestment ministry has clarified it will not be able meet the Budget target.
The government's income from dividend during 2001-02 doubled to Rs 7,088 crore against Rs 3,323 crore during the previous year. Budget 2002-03 has projected an income of Rs 8,043 crore from PSU dividends.
The six oil public sector units that are now formulating their response to the finance ministry are Oil and Natural Gas Corporation, Oil India Limited, Indian Oil Corporation, Hindustan Petroleum Corporation, Bharat Petroleum Corporation and Gail India Limited.
Most of these PSUs are, however, learnt to be of the view that they do not have surplus cash to share with the government. They are planning to cite their investment plans to drive home the point that any extra demand for funds would hit them hard, especially at a time when they are trying to consolidate their position after the dismantling of administered pricing mechanism in the oil sector.
However, the finance ministry is unwilling to buy this argument. Finance Minister Jaswant Singh made his intentions clear at the beginning of this month when he said, during a meeting with financial advisers to all the ministries, public sector units should go beyond mere mechanical fulfillment of the current guidelines, which required them to pay a dividend of at least 20 per cent of equity or 20 per cent of post-tax profit, whichever is higher.
In the case of the petroleum, power and telecom sectors, the guidelines provide that dividend pay-out should be at least 30 per cent of the post-tax profit.
While appreciating that dividend receipts are progressively increasing over the years, the finance minister pointed out that many of the PSUs had the capacity to pay much more.
