The Department of Investment and Public Asset Management (DIPAM) has collected Rs 30,369.72 crore as dividend from PSUs in FY21 so far. In a tweet, DIPAM Secretary Tuhin Kanta Pandey said, “Dividend receipts of GoI from CPSEs stand at about Rs 30,369 crore in the current financial year (as on 22.3.2021).”
Faced with a revenue crunch in the backdrop of the COVID-19 pandemic, the government is relying on, among other sources, PSUs to make up for the shortfall as far as possible and has clearly dictated the companies to pay interim dividends. In line with this direction, several PSUs have declared interim dividends in this financial year.
Govt has announced ‘consistent dividend policy’ for PSUs
On March 10, the DIPAM Secretary had said that the government has introduced a new ‘consistent dividend policy’ under which public sector undertakings (PSUs) will be paying between two to four interim dividends in a financial year to ensure continuity of dividends for shareholders. “We have announced a consistent dividend policy, therefore dividends are ensured. The dividend policy has been further fine-tuned to say that we need not wait for annual dividend, and we can have as many as four interim dividends in every quarter in some of the companies or maybe twice in a year,” said the DIPAM Secretary. He explained that a consistent dividend policy is something that rewards shareholders which include insurance companies, mutual funds.
The declaration of interim dividends by PSUs is not new, however, the official direction certainly seems to have created pressure on PSUs to reach out into their treasuries and deliver dividends to stakeholders. Resultantly, a number of PSUs have declared interims dividends over the past few weeks. The list of such PSUs include Power Grid, Coal India Ltd (CIL), RITES Limited, Indian Oil Corporation (IOC), GAIL, Power Finance Corporation (PFC), Hindustan Aeronautics Ltd (HAL), National Aluminium Company (NALCO), REC Limited, Bharat Electronics Limited (BEL), Mazagon Dock Shipbuilders, IRCON International, ONGC, IRFC, among others.