New Delhi, Oct. 18: The finance ministry wants cash-rich PSUs, which do not have significant expansion plans, to pay higher dividends or match the amount paid last year.
Finance minister P. Chidambaram told the chairmen of blue chip PSUs such as SAIL, Coal India, ONGC, Oil India, Indian Oil and NTPC that he expected them to pay dividend equal to last year’s payout.
“Dividend payments by PSUs will not be less than last year’s. In no case will we accept dividend less than last year’s,” he told reporters after the meeting.
The government received Rs 55,443 crore as dividend and profit in the last fiscal. The target in this financial year is Rs 73,866 crore.
The “invest or pay-up” diktat comes at a time North Block is battling lower revenue realisation in the face of an economic slowdown and unable to go ahead with plans to sell stakes in PSUs because of a choppy stock market.
The Centre is also seeking ways to boost growth. The economy grew 4.4 per cent in the April-June quarter. Getting the PSUs to invest in new plants, machinery and projects was seen as one way to kick-start the sluggish industrial sector, which grew just 0.6 per cent in August.
PSU chiefs are expected to come up with quarterly reports on their capital expenditure, and today’s meeting was part of that exercise, officials said.
“Most of the PSUs will achieve their capex plan. Some half-a-dozen may not. We will revisit those cases in January,” Chidambaram said.
ONGC chairman Sudhir Vasudeva said, “The finance minister was fully satisfied with ONGC’s capex performance. Our first-half capex target was over Rs 14,000 crore. We have spent 99.3 per cent. We will spend this fiscal’s capex of Rs 35,000 crore.”
SAIL chief C.S. Verma claimed the firm had met 87 per cent of the capex target in the first half of the year. “We will meet the full-year target of Rs 11,500 crore,” he said.
PSUs hold a whopping Rs 1.8 lakh crore in cash reserves, and the government is insisting that the money be either used in expansion or paid to it through dividends or share buybacks.