CPSE dividends likely to exceed ₹62,000 crore, 24% more than RE

The Centre is expected to close the fiscal year 2023-24 with more than ₹62,000 crore or even more through dividends from Central Public Sector Enterprises (CPSEs). If this happens, it will exceed revised estimates by more than 24 per cent. Also, this will be an all-time high, besides being the third successive year of ₹50,000 crore plus through dividends.

According to Department of Investment and Public Asset Management (DIPAM), during the current financial year 2023-24, over ₹61,000 crore has been obtained through dividend from the CPSEs. With some days remaining in the current fiscal year, officials expect more money to flow in. The latest number is higher not just than the budget estimate but also exceeds the revised estimate by a good margin.

While presenting the Union Budget for FY24, Finance Minister Nirmala Sitharaman estimated ₹43,000 crore through ‘Dividends from Public Sector Enterprises and other investments.’ However, this was revised upward to ₹50,000 crore. Disinvestment proceeds from CPSEs are likely to remain below the budget estimate of ₹51,000 crore, though the revised estimated has subsumed the receipts from disinvestment into ‘miscellaneous capital receipts’ and set the number as ₹30,000 crore, still, that may not be achieved.

  • Also read: Collection through dividend from CPSEs set to exceed ₹50,000 crore for third year in a row

Collections from dividends and disinvestment are part of non-tax revenue and are maintained by the DIPAM. While the combined collection is lower than the target, it is unlikely to affect the fiscal deficit revised target of 5.8 per cent as mobilisation through direct tax, GST, and RBI surplus is likely to be much higher.

Better dividend collection can be attributed to improved profitability of CPSEs and a consistent dividend policy. According to Finance Ministry guidelines announced in 2016, a CPSE would pay an annual dividend of 30 per cent PAT (profit after tax) or 30 per cent of the government’s equity, whichever is higher.

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However, due account should be taken of cash and free reserves with the CPSE and, accordingly, special dividend would have to be paid to the government as a return for its equity investments. Furthermore, CPSEs with large cash/free reserves and sustainable profit may issue bonus shares. “Any case of exception should be explained specifically by the concerned administrative ministry/department concerned to the Secretary DEA,” the guidelines say.

Later in 2020, an advisory on consistent dividend policy said that the CPSEs, especially companies that pay relatively higher dividend (100 per cent dividend or ₹10 per share), may consider paying quarterly dividend. For others, the frequency could be half yearly. Further, all CPSEs should consider paying at least 90 per cent of the projected annual dividend in one or more instalments as interim dividend.


During the Current Financial Year 2023-24 so far over ₹14,700 crore has been obtained through OFS, OFS (Employee), and Others. Selling stakes in CPSEs has not been easy for the government this fiscal. Though it managed to sell minor stakes in HAL, Coal India Ltd, RVNL, SJVN Ltd, and Hudco, strategic sell-off of IDBI Bank, Shipping Corporation, BEML PDIL, HLL Life Care Ltd and NMDC Steel Ltd are unlikely to be completed during the remaining part of the fiscal.

DIPAM attributes the snail’s pace of divestment to the emphasis it lays on value creation in CPSEs. It underlines that since the introduction of the new PSE policy in January 2021, the NSE CPSE and BSE CPSE indices have surpassed benchmarks, showcasing returns of over 160 per cent and 128 per cent, respectively, until November 2023, and even after that, momentum has been there.

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