Seeking to keep India’s fiscal deficit within the budgetary target of 4.8%, finance minister P Chidambaram on Friday told the heads of cash rich public sector companies that the government will not accept less dividend than what was paid by them in the last financial year.
"Dividend payments by PSUs will not be less than last year's.... in no case will we accept dividend less than last year's," he told reporters after meeting heads of blue-chip PSUs such as Oil & Natural Gas Corp, Indian Oil, GAIL India, Steel Authority of India, NTPC and Coal India.
The government received Rs 55,443 crore as dividend and profit in the last fiscal. The target in the current financial year is Rs 73,866 crore.
Higher dividends from large PSUs will help in bridging any shortfall arising from disinvestment and lower receipts in other heads of accounts due to slowing economic growth. Against a disinvestment target of Rs 40,000 crore, the government has so far raised only Rs 1,400 crore.
The ministry, according to officials, is hopeful of meeting the dividend receipt target in the current fiscal and has not sought any special dividend. However, they said the situation would be reviewed in January.
Chidambaram also discussed capital expansion plans of the PSUs with the objective of promoting investment and growth. "Most of the PSUs will achieve their capex plan. Some half-a-dozen may not. We will revisit those cases in January," the minister said.
Most of the PSU heads assured the minister that they would meet the capex target for the current fiscal.
ONGC chairman Sudhir Vasudeva told reporters that Chidambaram was fully satisfied by the performance of ONGC. “Our H1 capex target was over Rs 14,000 crore and we have spent 99.3%... we will spend this fiscal year's capex plan of Rs 35,000 crore. We have cash of around Rs 13,000 crore."
Sail too was confident of achieving its capex target for the current fiscal, chairman CS Verma told reporters.
"We have met 87% of capex target of first half of the year. We will meet capex target of whole year, which is Rs 11,500 crore", he said.
Last week, Chidambaram said at an IMF committee meeting in Washington that the government is committed to the path of fiscal consolidation and has drawn red lines for the fiscal and current account deficits.
"We shall not allow the red lines to be breached under any circumstances and we shall remain within the red lines. We are prepared to take difficult decisions in this regard, should the need arise," the minister had said.
India's GDP growth slowed to 5% in the year ended March from an average of 8% over the past decade. First-quarter (April-June) growth slipped to 4.4 % from 4.8 % in January-March.