NEW DELHI: Dividend from Central Public Sector Enterprises (CPSEs) has exceeded revised estimates for current fiscal i.e., 2024-25 (FY25) has reached all time high as it exceeded the revised estimates by over ₹10,000 crore. This figure does not include dividend from public sector banks and public sector financial institutions.
Data from DIPAM (Department of Investment and Public Asset Management) showed that around ₹66,000 crore has been received as dividend from CPSEs so far. As 16 more days are left in the current fiscal, expectation is that total amount is likely to touch ₹66,000 crore-₹67,000 crore. This amount is a key component of non-tax revenue. This is also likely to bridge part of the shortfall in ‘Miscellaneous Capital Receipts’ (amount to be raised through selling of minority shareholding or strategic disinvestment by the government).
The Union Budget, presented in July, pegged ‘Dividends from Public Sector Enterprises and other investments’ at ₹56,260 crore, which was lowered to ₹55,000 crore in the revised estimate. However, total realisation till date has exceeded ₹ 65,381 crore of last fiscal. At the same time, amount under ‘Miscellaneous Capital Receipts’ has reached just ₹8,625 crore as against revised estimates of ₹33,000 crore and actual of ₹33,121 crore during last fiscal.
According to the Public Enterprises Survey, there are 272 operating CPSEs, out of which 212 reported a net profit of ₹3.43 lakh crore in FY 2023-24, which is around 48 per cent higher than ₹2.18 lakh crore during FY 2022-23. Dividends declared by operating CPSEs in FY 2023-24 stood at ₹1.23 lakh crore against ₹1.05 lakh crore in FY 2022-23, showing an increase of over 16 per cent. Since there are just 66 CPSEs listed on stock exchanges, entire dividend of large number of CPSEs goes to the government only.
CPSEs belonging to three sectors – oil, coal and power – are expected to continue as top contributors in dividend payout. Oil companies have had a relatively better year this fiscal, as there has been no reduction in petrol and diesel retail prices. At the same time, the removal of windfall levies on export-bound petroleum products are also expected to boost profitability. At the same time, long season of higher temperatures has benefited both power and coal companies.
Late last year, the government revised the dividend policy for CPSEs. According to that, it has been stipulated that each CPSE would pay a minimum annual dividend of 30 per cent of Profit After Tax (PAT) or 4 per cent of the net worth, whichever is higher subject to the limit, if any, under any extant legal provision. Financial sector CPSES like NBFCs may pay a minimum annual dividend of 30 per cent of PAT subject to the limit, if any, under any extant legal provisions.
“The minimum dividend as indicated above is only a minimum benchmark. CPSEs are advised to strive to pay higher dividends taking into account relevant factors such as profitability, capex requirements with due leveraging, cash reserves and net worth,” new guidelines said.
Source: The Hindu Business Line
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