Unprecedented Dividends from Central Public Sector Undertakings

Central public sector undertakings (PSUs) are set to distribute record dividends ranging between Rs 1.3-1.4 lakh crore in the current fiscal year. This significant payout is expected to not only exceed the government's budgeted revenue but also benefit millions of retail investors holding shares in these entities.

Profit Surge Fuels Dividend Hopes

Official estimates predict that profits from these companies will surpass the Rs 3.5 lakh crore mark for the first time, marking a 10% increase from the previous year. This profit surge is the backbone of the anticipated dividend distribution.

Government Guidelines Ensure Fair Share

The Department for Investment and Public Asset Management (DIPAM) and the Department of Public Enterprises (DPE) are enforcing government guidelines that mandate at least 30% of profits or 4% of net worth to be shared as dividends. This ensures PSUs retain sufficient funds for capital expenditure, a key focus area for the government.

Boosting Investor Confidence and Fiscal Health

Arunish Chawla, Secretary of DIPAM, emphasizes the role of public enterprises as stock market role models, urging the private sector to follow suit in declaring fair dividends. This move aims to restore the confidence of ordinary investors in the stock market. Additionally, the higher dividend payout is expected to contribute approximately Rs 10,000 crore more than the revised estimate for the current fiscal year, aiding in the improvement of the overall fiscal deficit.

Future Investments and Economic Growth

With central PSUs' capital expenditure projected to reach Rs 3.6 lakh crore this fiscal year and expected to grow to Rs 4.3 lakh crore by 2025-26, the government aims to invest more in asset creation. This strategy not only generates demand for essential inputs like steel and cement but also creates numerous job opportunities, contributing to the nation's economic growth.