Interim Dividend Of PSUs Is Patrimony Of State: FinMin

New Delhi, Nov 14: | Updated: Nov 15 2003, 05:30am hrs
The finance ministry (FinMin) on Friday defended the governments decision to raise resources through interim dividend route from public sector oil companies.

Interim dividend is patrimony of the state, government is the owner, it is like rent accruing to the owner, a senior Finmin functionary said. It is a normal procedure for PSUs to part with profits in favour of the state. Oil PSUs had last year paid Rs 2,687 crore interim dividend to bail out government finances. This year, they may pay Rs 3,500 crore. ONGC had paid Rs 2038.88 crore interim dividend, IOC Rs 319 crore, Gail Rs 170.83 crore and BPCL Rs 39.72 crore.

Meanwhile, the finance ministry official stated that the feel good factor had a real basis with exports on an upswing, investments picking up and demand in labour growing. We will be entering the golden age of growth, he said and added that the number of better performing states was increasing.

On the issue of restructuring of Dabhol power project, the official said that the finance minister had set up a committee headed by Naresh Chandra to begin a track II negotiations on resolving the issue with lenders. Other members of the committee are advisor to the finance minister Vijay Kelkar and Pradip Deb, joint secretary.

The governments focus in the remaining of the fiscal will be fiscal consolidation, infrastructure, education, modernisation of agriculture, tariff reduction and privatisation. In terms of fiscal correction, the official said that the primary strategy would be on improving tax revenues and secondary focus would be on expenditure control. Tax to GDP ratio has to improve and we should target an increase by 3-4 per cent, the official said.

Commenting on the issue of tariffs, the objective is to reach single digit in tariff reduction...but that may take a while. In terms of agriculture we need another revolution where we move from addressing calorie gap requirements to protein and vitamin gap, he said and added that agriculture minister Rajnath Singh has constituted a committee to look into these issues.