The government’s dividend collection from non-financial central public sector enterprises (CPSEs) and other investments in this financial year could amount to about ₹55,000 crore, more than a quarter higher than the budgetary target of ₹43,000 crore, said a senior official.
However, the Centre could reduce its combined disinvestment and dividend (from non-financial CPSEs) mop-up in the revised estimate for 2023-24 from the budgeted ₹94,000 crore given the expected steep shortfall in divestment proceeds from the targeted ₹51,000 crore due to the IDBI Bank strategic sale process spilling over to 2024-25, the official told ET.
The Department of Investment and Public Asset Management has garnered ₹53,895 crore in dividend and disinvestment receipts so far this fiscal. At ₹43,843 crore, the dividend has already exceeded the 2023-24 target, even as the disinvestment revenue has remained low at ₹10,052 crore. ET had reported in November 2023 that the 2023-24 dividend target could be surpassed but the surplus dividend might not be enough to fully make up for the disinvestment shortfall.
But given that the combined target makes up less than 3.5% of the government’s budgeted non-debt receipts for the fiscal, any such shortfall may not disrupt the government’s financial calculations, said another official. One of the officials said there is only a remote possibility of the dividend receipts exceeding last fiscal’s level of ₹58,988 crore. A significant driver of last year’s dividend revenue was Hindustan Zinc Ltd (HZL), which forked out about ₹9,000 crore to the government on its 29.54% holding in the miner, he said. Such a sum from HZL is not feasible in this fiscal as it has depleted its cash reserves.Moreover, prospects of huge dividends by large state-run oil firms, which usually account for a significant chunk of such non-tax revenue, are uncertain this year given the volatility in global crude oil prices in the aftermath of the Israel-Hamas war.
If the global crude oil prices bounce back again and state-run oil firms don’t pass on the costs to consumers in the build-up to the 2024 general election, their profitability and ability to pay dividends may falter, officials had told ET in November 2023. CPSEs from some other sectors, such as power, are doing well and may continue to give good dividends.
The average monthly crude oil price (Indian basket) has moderated to $77.1 so far in January. from $77.42 in December and $90.08 a barrel in October (the war started on October 7). Global oil prices rose again last Friday amid fears the crisis may escalate to other parts of West Asia, adding fresh uncertainties to any benign outlook.
