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Govt targets Rs 1 lakh cr in dividend collection next fiscal

Profit-making CPSEs required to declare a minimum dividend on equity of 20% or a minimum dividend payout of 20% of post-tax profit

Press Trust of India  |  New Delhi 

The government aims to collect over Rs 1 lakh crore in dividend from public sector companies and banks in 2015-16, a 13% increase over previous year.

The government will collect Rs 88,781 crore on account of dividends in the current fiscal, the document shows..

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All profit-making central public sector enterprises (CPSEs) are required to declare a minimum dividend on equity of 20% or a minimum dividend payout of 20% of post-tax profit, whichever is higher, subject to availability of disposable profits.

In the case of with large disposable profits or healthy cash reserves, a higher or special dividend may also be considered.

Of the Rs 1,00,651 crore budgeted from dividends, Rs 36,174 crore is estimated to come from CPSEs and Rs 64,477 crore from banks, financial institutions and RBI.

For the current fiscal, however, the dividend income of Rs 88,781 crore as per the revised estimates has been lower than the budgeted Rs 90,229 crore.

The Finance Ministry in every financial year nudges CPSEs sitting on hefty cash balance to either go in for huge capital expenditure or shell out dividends.

Dividend income is the largest head under the non-tax revenue head of the government balance sheet from which it mobilises funds to fund its expenses.

In the for 2015-16, the government has emphasised that it would emphasise on investments to propel growth and has also projected a fiscal deficit target of 3.9% of GDP.

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First Published: Sun, March 01 2015. 12:54 IST