So, it’s finally done.
All the high-profile meetings between public-sector undertakings and the government have finally ended with an agreement that state-run entities will shell out Rs 7,000 crore in dividends.
“The government held meetings across the board with PSUs and PSU banks, and managed to get around Rs 7,000 crore as dividends to breach the deficit gap” a CNBC TV-18 report said.
The government will be banking on Coal India, which is sitting on Rs 50,000 crore in cash, to shoulder the main responsibility of the dividends.
Rethinking the disinvestment strategy. Reuters
In addition, the government said that its original disinvestment target of Rs 40,000 crore was impossible to meet and that the target had now been scaled down to Rs 10,000 crore.
However, there will be more clarity on the subject next month, after the government becomes more certain about its tax revenues, Sethi added.
The government is, once again, considering launching a follow-on public offer for oil producer ONGC by the end of March, the report noted.
Firstpost had reported earlier that the government planned to nudge top public-sector companies into coughing up higher dividends, and would target some cash-rich companies with low capital expenditure plans.
The BSE PSU index, a collection of about 60 government-owned companies, has shot up by 15.7 percent since the start of the year on hopes of a higher dividend payout. In comparison, the Sensex has gained 10 percent.
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