Dividends from CPSEs may fetch govt Rs 55k cr

Aided by robust dividend payout from energy, power and commodity firms, the Centre’s dividend receipts from Central Public Sector Enterprises (CPSEs) will likely be around Rs 55,000 crore in the current financial year — around 28% higher than the revised estimate (RE) of Rs 43,000 crore.

So far, the Centre has received Rs 50,280 crore in dividends from CPSEs.

Fresh tranches are expected from several CPSEs during this month, including about Rs 668 crore from National Mineral Development Corporation and Rs 517 crore from the Power Finance Corporation.

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The Board of Hindustan Aeronautics (HAL) will declare the second interim dividend for FY23 on Friday, which will be paid to the shareholder by March-end. Unlisted CPSEs such as Nuclear Power Corporation of India are also expected to pay their dividends later this month.

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In the last two weeks, dividend receipts were boosted by fresh tranches from Oil and Natural Gas Corporation (Rs 2,964 crore), Coal India (Rs 2,140 crore), NTPC (Rs 2,106 crore) and Power Grid Corporation (Rs 1,791 crore).

FE had reported on February 23 that the Centre’s dividend receipts will cross Rs 50,000 crore in FY23 despite much lower receipts from fuel retailers, which reported record losses in H1 due to a spike in global crude prices.

The Centre had garnered Rs 59,000 crore in dividends from CPSEs in FY22, 28% more than the target of Rs 46,000 crore for the year, thanks to a sharp rise in prices of commodities like metals, mining and petroleum, which boosted the profits of these firms.

Despite windfall taxes on domestic crude production, ONGC reported a robust 26% year-on-year rise in net profit to Rs 11,045 crore for the quarter ended December 31. Similarly, Coal India’s post-tax profit during Q3FY23 rose sharply by 69% on year to Rs 7,719 crore.

Higher dividends by CPSEs could act as a buffer for the government if it falls short of meeting the revised disinvestment target of Rs 50,000 crore for the current financial year. Disinvestment receipts stood at Rs 31,106 crore so far in FY23 or 62% of the RE. The government is banking on the sale of a portion of its residual 29.54% stake in Vedanta-controlled Hindustan Zinc to meet the disinvestment target for FY23.

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Following about the Rs 30,000-crore shortfall in dividend/ surplus receipts from the Reserve Bank of India in FY23, the Centre has lowered dividend receipts from banks and financial institutions by 45% to Rs 40,953 crore in FY23RE. Officials are confident that the Centre will be able to meet the Rs 2.62 trillion non-tax revenue target as per FY23RE.