Oil PSUs May Be Milched To Bridge The Fiscal Deficit

New Delhi, Nov 13: | Updated: Nov 14 2003, 05:30am hrs
As part of its efforts to bridge the fiscal deficit, the government is considering a proposal for payment of interim dividend by state-owned oil companies.

A high-level meeting of senior government officials from the ministries of finance, disinvestment and petroleum was held on Thursday to discuss various possibilities including that of an interim dividend from oil PSUs to garner resources for meeting budgetary deficit. Amongst others, the meeting was attended by advisor to finance minister Vijay Kelkar and additional secretary (budget) D Swarup.

Petroleum secretary BK Chaturvedi said the government was considering whether an interim dividend could be paid by oil PSUs. The matter would be further discussed with oil companies, he told reporters after the meeting. The petroleum secretary, however, did not indicate the quantum of dividend the oil companies would be asked to pay.

The move is a part of efforts made by government to mop up additional revenue to bridge the fiscal deficit in the wake of Supreme Court halting big-ticket disinvestment of the two oil companies - Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL).

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.

Sources said the proposal for offloading 20 per cent stake in Indian Oil Corporation (IOC) and 5 per cent in Oil and Natural Gas Corporation (ONGC) also came up for discussion.

In addition to this, the officials also discussed dissolving the cross-holding in oil PSUs. While IOC has a 9.62 per cent stake in ONGC and a 4.8 per cent holding in Gail, ONGC has a 9.11 per cent stake in IOC and a 4.82 per cent holding in Gail. Gail has a 2.4 per cent stake in ONGC. The oil companies have been making requests for getting rid of the cross-holding as to increase liquidity of their shares.