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The Railway Convention Committee (RCC) has recommended a lower dividend rate for the fiscal 2011-12. It has said that the Indian Railways should pay a dividend of 5 per cent to the Government for the fiscal.
This is lower than the dividend rate of six per cent fixed for 2010-11 and 2009-10. Broadly, dividend is paid on the entire capital invested by Government in the Railways.
The Railway Ministry had requested for a 3 per cent dividend rate, after its earlier request for a five-year dividend waiver was turned down. Usually, the Railway Ministry requests for a lower dividend rate and the Finance Ministry requests for a higher dividend rate.
RCC is a Parliamentary Committee. The decision is firmed up after a Cabinet approval.
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