Odisha revised dividend payment norms for PSUs

The state govt has decided that a state PSU would pay an annual dividend of 30%

The Odisha government has revised the terms for payment of dividend by its PSUs. The changed terms are in sync with the Government of India's new guidelines for payment of dividend by central public sector enterprises (CPSEs) in sync with the observations of the 14th Finance Commission.

The Commission observed that while operational decisions of a PSU lie with the concerned entity, final decision relating to dividends and reserves should remain with the government as owners.

Accordingly, the state government has decided that a state PSU would pay an annual dividend of 30 per cent or 30 per cent of state government equity, whichever is higher.

The state PSUs are to take due account of their cash and free reserves, and accordingly, special dividend is to be paid to the government as return for its equity investments. The state PSUs with large cash or free reserves and sustainable profit are required to issue bonus shares.

According to the guidelines, keeping in view the capital investment requirement of state PSUs, it would be assessed if these requirements can be met partly or fully out of borrowings to leverage the favourable debt-equity ratios in the PSUs.

The public enterprises department and other administrative departments are required to take stock of the financial results of the state PSUs under their administrative control and enfirce discipline.