CPSE dividends robust, may surpass Rs 60,000 crore in FY25
The Centre’s dividend receipts from the Central Public Sector Enterprises (CPSEs) and its other investments have fetched about Rs 21,000 crore so far in the current financial year or 37% of the annual target. Going by the performance of the CPSEs so far, the dividend receipts from these companies may exceed Rs 60,000 crore for the second year in a row in FY25 as against the budget estimate for the year of Rs 56,260 crore.
As against the revised budget estimate of Rs 50,000 crore, the dividends from CPSEs and residual stakes in other firms had fetched the Centre Rs 63,749 crore in FY24, the highest in any financial year.
So far in FY25, oil and gas companies are the top dividend payers with Rs 7,504 crore, followed by mining, communications and power.
Indian Oil has paid Rs 5,091 crore, followed by Hindustan Zinc (in which government owns 29.54% stake) with Rs 3,619 crore, Telecommunications Consultants India (Rs 3,443 crore) and Bharat Petroleum Corporation (Rs 2,413 crore).
Among others, the government received a tranche of Rs 1,610 crore from NTPC and Rs 1,264 crore from Power Grid Corporation of India.
These CPSE dividends, other than from the Reserve Bank of India and state-run financial institutions, have been driven by robust performance in a wide spectrum of sectors including petroleum, energy, mining and commodities.
Given that the oil marketing companies’ (OMCs) profitability has improved substantially due softening of global crude prices compared to last year, the CPSE dividend receipts will likely be over Rs 60,000 crore in FY25, sources said.
The robust dividends of CPSEs have benefited both the government and minority shareholders equally. Despite the government reducing its stake in several of these companies, the Department of Investment and Public Asset Management (Dipam)’s capital management policy of nudging CPSEs to increase efficiency, expand capacity and give higher dividends to keep investors’ interest in their stocks has aided the dividend payouts.
Higher dividend receipts from CPSEs will further cushion the government’s fiscal deficit in FY25. Thanks to the dividend of Rs 2.11 trillion from the RBI as against the budget estimate of Rs 80,000-90,000 crore, the government has pegged the fiscal deficit for FY25 at 4.9% of GDP from 5.1% estimated in the interim budget.