New Delhi, Feb. 2: State-owned Coal India plans to pay Rs 5,684.73 crore as dividend to the government in 2011-12 — more than double the amount paid last fiscal — at a time the Centre struggles to meet its ballooning fiscal deficit.
Coal India and Neyveli Lignite Corporation together are proposing to pay a dividend of Rs 6,124.24 crore to the government for 2011-12, officials said.
Coal India had paid a dividend of Rs 2,217 crore to the government in the last fiscal, Rs 2,210 crore in 2009-10 and Rs 1,705 crore in 2008-09.
Fiscal deficit in 2011-12 is expected to exceed the budgeted estimate of 4.6 per cent of the gross domestic product (GDP) by almost a percentage point as revenue weakens because of a slowing economy while government spending remains high.
To bridge the gap between revenue and expenditure, the government plans to exceed its borrowing target of Rs 4.20 lakh crore for this fiscal by Rs 92,000 crore.
The government is resorting to temporary measures to get control over the budget deficit… What needs to be done is to take durable and credible steps to cut the deficit, D.K. Joshi, economist with rating agency Crisil, said.
With divestments yielding only Rs 1,145 crore this year against the budgeted Rs 40,000 crore, the finance ministry has been looking for other sources of revenue to trim deficit.
Economic affairs secretary R. Gopalan had met the top officials of key PSUs such as Coal India, Nalco, SAIL, RINL and Neyveli Lignite to discuss their expansion plans and cash reserves.
Of the top 17 PSUs, which have cash balances of almost Rs 1.62 lakh crore, Coal India has the largest cash reserve of almost Rs 55,000 crore, followed by ONGC with Rs 27,441 crore.
The government has budgeted Rs 23,500 crore in dividends on its investments in state-run firms in 2011-12, marginally down from Rs 26,000 crore it got in the previous year. It should now end the year with nearly Rs 30,000 crore in dividend.
Finance minister Pranab Mukherjee has informed Parliament that the subsidy bill for the fiscal was likely to exceed budget estimates by Rs 1 lakh crore. A total of 56 central PSUs had declared over Rs 26,000 crore in dividends in 2010-11, 6 per cent more than the previous year.