The finance ministry today said it expects the public sector units to pay "good amount" of dividend in the current fiscal. "The meetings (with PSUs) are going good. I hope we will be getting some good amount (of dividend).
Effort is on," Economic Affairs Secretary R Gopalan told reporters here. Pressed hard for funds, Finance Ministry officials are meeting the heads of PSUs to persuade them to increase dividend payment to the government. At the meeting with the PSU chiefs in sectors like steel, coal, mines, power and oil in the last two days, however, they failed to obtain an assurance of larger dividend receipt from companies.
While a majority of the PSUs said they would retain the dividend paid last year as paying out of their cash reserve would hinder their expansion plans, oil companies hinted that the final dividend would be decided after assessing the under-recoveries and subsidy provided by the government.
"We are conscious of the fact that they also need resources for their own financing programme. They also understand our need. So in the spirit of cooperation we are trying to see how our needs can be met consistent with our requirement," Gopalan said.
The Finance Ministry has already discussed the issue with PSUs like SAIL, NALCO, PFC, REC, ONGC, IOC and Oil India among others. "The final dividend would depend on the subsidy burden. If the burden remains reasonable, then we will give what we normally give -- that is between 320 to 330 per cent. Hopefully it should be in that range, if subsidy burden does not increase unduly," ONGC Chairman and MD Sudhir Vasudeva had said after the meeting.
The government is seeking higher dividends from PSUs to tide over the financial problem which got aggravated because of rising subsidy bill and slow progress on the disinvestment front. While the subsidy bill during the current fiscal is expected to shoot up by an additional Rs one lakh crore, the government is unlikely to meet the disinvestment target of Rs 40,000 crore.
The government has already announced borrowing an additional Rs 90,000 crore to bridge the revenue-expenditure gap. There are apprehensions that the Centre's fiscal deficit -- the gap between overall revenue and expenditure --is likely to exceed the Budget estimate of 4.6 per cent of GDP in this fiscal. Under the existing norms, profit-making PSUs are required to declare a dividend of at least 20 per cent of government's equity investment, or 20 per cent of post-tax profit, whichever is higher.
In the case of oil, petroleum, chemicals and other infrastructure industries, the pay-out has to be at least 30 per cent of post-tax profits