Economy

Finance Ministry rules out changes in PSU dividend norms

K.R. Srivats New Delhi | Updated on March 12, 2018 Published on January 14, 2012

The Centre has no plans to change existing dividend payout norms for central public sector enterprises, even as it is hopeful of convincing them to increase their dividends to the Government this fiscal.



“This is a one-off kind of exercise. There is no need to revise guidelines. The meetings are going well. I hope we will be getting some good amount (through dividend),” Mr R. Gopalan, Economic Affairs Secretary, told reporters here on Saturday.



Hectic parleys are on between the Finance Ministry and the Chairmen of various public sector enterprises in the last few days on the issue.



With Government finances not all that healthy, there are apprehensions that the existing norms may change to gain larger dividend payouts.



The existing norms require profit-making state-owned entities to declare a minimum 20 per cent dividend or at least 20 per cent of post-tax profits, whichever is higher.



Mr Gopalan said that the Finance Ministry fully understands that public sector enterprises need resources for their investment plans, just as they understand the needs of the Government.



“So in a spirit of co-operation, we are trying to see how our needs can be met consistent with our requirements.”



The Finance Ministry officials have already held discussions with the chief executives of PSUs such as SAIL, Nalco, PFC, REC, ONGC, IOC and OIL India.



Subsidy burden



A number of profit making public sector enterprises have hinted that they are likely to retain the dividend payouts made last year.



However, oil companies have been somewhat circumspect on this front, stating that the final dividend payout would be decided after assessing the under-recovery and subsidy provided by the Government.



“Our final dividend would depend on subsidy burden. If the subsidy burden is reasonable, then we will give what we normally give…. that is 320 to 330 per cent. Hopefully, it should be in that range if subsidy burden does not increase unduly,” Mr Sudhir Vasudeva, ONGC Chairman, had told reporters after a meeting with the Finance Ministry officials.



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Published on January 14, 2012
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