At close to Rs 22,000 crore, PSU dividends remain robust and may exceed Budget Estimates

The Centre has received nearly Rs 22,000 crore from central public sector undertakings as dividend in the first six months of the current fiscal year and indications are that it could exceed the Budgeted target for the fiscal. However, with just one PSU stake sale so far this fiscal, receipts from disinvestment remain low.

According to official data, 25 PSUs have given Rs 21,814.91 crore as dividend to the Centre between April and now this fiscal. Amongst these, Indian Oil Corporation has paid the highest dividend till now of Rs 5,090.54 crore, followed by Hindustan Zinc that has paid Rs 3,619.06 crore and Telecommunications Consultant (India) Ltd that has paid Rs 3,442.92 crore.

For 2024-25, the Budget has pegged dividends from PSUs at Rs 56260.00 crore, which is marginally higher than the Revised Estimates of Rs 50,000 crore for 2023-24. Significantly, last fiscal, the Budget estimate for PSU dividends was Rs 43,000 crore but the actual realisation was much higher at Rs 63,749.28 crore.

“Going by the trends, it is likely that dividends from PSUs would exceed the Budget estimates once again,” noted a person familiar with the development adding that a decision on revising the estimates would be taken later in the year as part of the Budget 2025-26 exercise.

However, receipts from disinvestment of PSUs have remained low at Rs 3,160.55 crore. The Centre has recently raised Rs 2,345.55 crore from the 3.39% offer for sale in the General Insurance Corporation. Apart from that, it has received Rs 815 crore as remittance from SUUTI.

Disinvestment has remained on the back burner due to the model code of conduct and General Elections earlier this year. It is expected that there would be a few more PSU stake sales will take place this fiscal but the lineup will be finalised based on market conditions.

The Union Budget however, does not have a fixed target for receipts from stake sales this fiscal but has kept an overall target of Rs 50,000 crore from miscellaneous capital receipts. These include receipts on account of management of equity investments and public assets through various mechanisms.

Earlier this month, the Centre also approved the sale of Ferro Scrap Nigam Ltd, which is a subsidiary of MSTC, along with management control to Japan’s Konoike Transport Co for Rs 320 crore.