The Centre is set to receive a windfall of dividends from its Central Public Sector Enterprises (CPSEs) in the current financial year, thanks to the strong performance of energy, power and commodity firms amid rising global prices. The dividend receipts from CPSEs are likely to be around ₹55,000 crore in FY23, which is 28% higher than the revised estimate (RE) of ₹43,000 crore.
Robust payouts by energy and commodity firms
The Centre has already received ₹50,280 crore in dividends from CPSEs so far in FY23, and more tranches are expected from several CPSEs during this month, including about ₹668 crore from National Mineral Development Corporation and ₹517 crore from the Power Finance Corporation. The Board of Hindustan Aeronautics (HAL) will declare the second interim dividend for FY23 on Friday, which will be paid to the shareholder by March-end. Unlisted CPSEs such as Nuclear Power Corporation of India are also expected to pay their dividends later this month.
Among the major contributors to the dividend receipts are Oil and Natural Gas Corporation (ONGC), Coal India, NTPC and Power Grid Corporation. ONGC has paid ₹7,409 crore to the government in dividends so far in FY23, 7% more than ₹6,916 crore for the whole of FY22. Similarly, Coal India dividend payments to the Centre at ₹7,336 crore so far in FY23 have surpassed the ₹7,132 crore it paid in the whole of FY22. Despite windfall taxes on domestic crude production, ONGC reported a robust 26% year-on-year rise in net profit to ₹11,045 crore for the quarter that ended December 31. Similarly, Coal India’s post-tax profit during Q3FY23 rose sharply by 69% on year to ₹7,719 crore.
Buffer for disinvestment shortfall
The higher dividends by CPSEs could act as a buffer for the government if it falls short of meeting the revised disinvestment target of ₹50,000 crore for the current financial year. Disinvestment receipts stood at ₹31,106 crore so far in FY23 or 62% of the RE. The government is banking on the sale of a portion of its residual 29.54% stake in Vedanta-controlled Hindustan Zinc to meet the disinvestment target for FY23.
The Centre had garnered ₹59,000 crore in dividends from CPSEs in FY22, 28% more than the target of ₹46,000 crore for the year, thanks to a sharp rise in prices of commodities like metals, mining and petroleum, which boosted the profits of these firms.