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Centre’s Dividend Receipts from CPSEs
Context:
The Central Government’s dividend receipts from Central Public Sector Enterprises (CPSEs) and other investments have reached ₹50,000 crore, fulfilling 91% of the annual target for the current financial year.
Revised Dividend Target for CPSEs
- In the Union Budget (February 1, 2024), the government marginally revised its dividend receipt target for CPSEs to ₹55,000 crore, slightly lower than the initial estimate of ₹56,260 crore.
- This revision reflects a more conservative outlook despite strong performances across key sectors.
Key Contributors to Dividend Payouts
- The strong dividend payouts from CPSEs, excluding the Reserve Bank of India (RBI) and state-run financial institutions, have been driven by robust performance in petroleum, energy, mining, and commodities.
- Top dividend contributors to the government include:
- Coal India – ₹8,073 crore
- Oil and Natural Gas Corporation (ONGC) – ₹6,298 crore
- Indian Oil Corporation (IOC) – ₹5,091 crore
- Telecommunications Consultants India – ₹3,762 crore
Impact on Fiscal Deficit
- Higher dividend receipts from CPSEs and the RBI have played a crucial role in reducing the fiscal deficit in recent years.
- The RBI’s record dividend payout of ₹2.11 trillion far exceeded the budgeted estimate of ₹80,000-90,000 crore.
- This unexpected windfall has enabled the government to revise the fiscal deficit target for FY25 to 4.8% of GDP, an improvement from the earlier projection of 4.9%.
A fiscal deficit occurs when a government’s total expenditures exceed its total revenue within a fiscal year. It signifies the extent to which a government must borrow to cover its spending.
The government’s strong dividend inflows from CPSEs and the RBI continue to be a key factor in fiscal management, helping cushion budgetary pressures and maintaining financial stability.
