Dividend from PSUs exceed revised estimates target by 26% in FY24

Dividend collected by the Centre from public sector undertakings (PSUs) has exceeded the revised estimates (RE) target by nearly 26 per cent during financial year 2023-24 (FY24). It has touched Rs 62,929.27 crore, according to data from the Department of Investment and Public Asset Management (DIPAM).

Higher-than-estimated dividend collection can be attributed to the consistent dividend policy announced in 2020. It requires state-run companies to pay interim dividends against one annual payout.

The RE stood at Rs 50,000 crore compared to the budget estimate (BE) of Rs 43,000 crore set during the beginning of FY24.

For the next financial year (FY25), the government has estimated such dividends at Rs 48,000 crore.

Robust dividend mop-up by central public sector enterprises (CPSEs) in FY24 made up for the disinvestment receipts that lagged behind the government’s estimate.

The government has been able to meet almost 92 per cent of its intended disinvestment target at Rs 16,507.29 crore by the end of FY24, according to the official data.

The government did not share the disinvestment receipts’ RE in the interim Budget document.

DIPAM secretary Tuhin Kanta Pandey had last month told Business Standard that the government was hoping to garner about Rs 18,000 crore from disinvestments by March.

He also said the government is shunning the ‘targeting’ approach, in terms of a standard target fixation for disinvestment from next year.

The government had anticipated disinvestment proceeds worth Rs 51,000 crore at the beginning of the year.

However, key transactions for stake sale got deferred due to the state elections and general elections starting April.

For instance, IDBI Bank, Shipping Corporation of India, NMDC Steel and BEML stake sales, planned for the current financial year, has been delayed.

Of the Rs 16,507.29 crore raised by the government, most of it includes small stock market transactions, such as offer for sale (OFS) in Coal India, Rail Vikas Nigam Ltd, SVJN, Housing & Urban Development Corporation of India, Ireda, Ircon International and NLC India.

This is the fourth time in a row that the government has not been able to meet the disinvestment target set at the beginning of the year. In the recent past, the government was able to meet its disinvestment target in FY19.

In FY20, the actual collections were half the BE for the year.

During the pandemic years — FY21 and FY22 — the receipts were significantly lower than the BE, followed by a similar trend in FY23.