CPSE Dividends Outshine Disinvestment, Fueling Robust Revenue for Centre

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CPSE Dividends Outshine Disinvestment, Fueling Robust Revenue for Centre

A Steady Source of Revenue for the Centre

Dividends from central public sector enterprises (CPSEs) have emerged as a reliable and robust source of income for the Indian government. These dividends are expected to surpass proceeds from disinvestment and are likely to exceed the Budget Estimate of Rs 56,000 crore for the current fiscal year.

The Union Budget 2025-26 is also anticipated to set an ambitious target for dividends from CPSEs, potentially exceeding this year's budgeted target. For FY25, the Centre has budgeted dividends from CPSEs at Rs 56,000 crore. Official data reveals that dividends from CPSEs have already brought in Rs 48,375.77 crore. This includes dividends from 77 CPSEs, with the highest being from Coal India Ltd at Rs 8,073.28 crore, followed by Oil and Natural Gas Corporation of India Ltd, which paid Rs 6,297.54 to the Government of India this fiscal.

With CPSEs expected to continue performing well, proceeds from dividends are projected to remain robust next fiscal year. The new dividend policy of the Centre mandates state-run firms to pay a minimum dividend of 30% of their profit after tax or 4% of its net worth every year. This policy ensures that CPSEs continue to provide substantial revenue to the Centre in the coming year.

In past fiscal years as well, CPSE dividends have been strong and have exceeded their budgeted targets. In FY24, CPSEs gave Rs 63,749.29 crore as dividends, while in FY23 and FY22, they came in at a little more than Rs 59,000 crore.

Proceeds from stake sales have remained subdued so far this fiscal at just about Rs 8,625.05 crore. While the Budget does not have a separate category of receipts from PSU stake sales now, it has estimated Rs 50,000 crore from "miscellaneous capital receipts" in FY25 from disinvestment and asset monetisation.