After a record surplus transfer from the Reserve Bank of India (RBI), there is more good news in store for the central government. Spectrum and critical mineral auctions are expected to bring in cash flows in the first half of the current fiscal. Additionally, good performance by the Central Public Sector Enterprises (CPSE) and Public Sector Banks (PSBs) will yield rich dividends, further bolstering the public exchequer.

These numbers are likely to be factored in the full budget expected in July after the new government is sworn in. There is also expectation that fiscal deficit for FY25, as projected in the interim budget, will also be revised. The interim budget has projected fiscal deficit at 5.1 per cent.


The telecom spectrum auction is slated to begin early next month. The Department of Telecommunications (DoT) is expecting a haul of at least ₹40,000 crore from the auction, estimated through earnest money (₹4,350 crore) that the telecom service providers (TSPs) had deposited last week, a senior government official told businessline.

The DoT is placing spectrum worth ₹96,317.65 crore for the upcoming auction, where a total of 10,513.15 MHz of spectrum will be put to auction. Last week, three major TSPs — Bharti Airtel, Reliance Jio, and Vodafone-Idea — were selected as pre-qualified bidders for the auction. Airtel has deposited ₹1050 crore, Reliance Jio ₹3,000 crore, and Vodafone Idea ₹300 crore as earnest money respectively.

Strategic Mineral Auction

As per the new rules for the auction, the Mines Ministry is proposing a cap on upfront payments and performance security payments of ₹500 crore. Additionally, performance security for a composite licence is proposed to be capped at ₹250 crore before issuing the licence and at ₹500 crore before issuing a mining lease.

The first tranche of 20 critical mineral blocks was put up for auction in November, and the winners of some 6-7 are expected to be announced around July. Another seven that received less than three bidders were put up for auction in the third tranche, announced in March. The Centre had valued the first 20 blocks at ₹45,000 crore.

CPSE dividend

Another key source of revenue in the first half of the current fiscal is dividends from CPSE and banks. Better dividend collection can be attributed to the 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.

Later in 2020, an advisory on consistent dividend policy said that the CPSEs, especially companies that pay relatively higher dividends (100 per cent dividend or ₹10 per share), may consider paying quarterly dividends. 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 installments as an interim dividend.