Govt expects lower dividend proceeds from PSUs in FY19

Govt expects lower dividend proceeds from PSUs in FY19
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New Delhi: The government expects lower dividend proceeds at Rs 52,494.71 crore from central public sector enterprises and other investments during 2018-19.

This is going to be nearly Rs 2,315.29 crore lesser than Rs 54,810 crore estimated for the current fiscal, as per the Budget document.

However, as per the Budget estimate for 2017-18, the government expected Rs 67,529.24 crore from central public sector enterprises and other investments.

The lower dividend from these companies indicates that profitability of these enterprises would be under stress during the next fiscal.

As per the norms, all profit-making central public sector undertakings (CPSUs) are required to declare a minimum dividend on equity of 20 per cent or a minimum dividend payout of 20 per cent of post-tax profit, whichever is higher, subject to availability of disposable profits.

However, the government as majority shareholder could seek higher dividend from PSUs with large disposable profits or healthy cash reserves.

A higher or special dividend may also be considered. Dividend from CPSUs is a return on investment made by the government.

PTI