Ambivalence on PSU policy: Budget 2025 eyes higher dividends, lower equity

In a departure from the past many years, its contribution to the PSUs' capital outlay by way of equity and loans will decline

Has the Union government’s approach to its public-sector undertakings (PSUs) changed? The Union Budget for 2025-26, presented early this month, provides a few pointers. But in order to assess how the approach to PSUs has changed or remained the same, it will be useful to set the latest Budget numbers in a historical context.

 

Let us start this exercise by first looking at 2019-20, the first year of the Narendra Modi government’s second term and before Covid struck the Indian economy. From a financial-performance perspective, this was not a good year for PSUs under the government.

 

Dividend from PSUs fell