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Govt Falls Short Of Its Disinvestment Goal But Reports Higher Dividend Receipts

Dividend receipts from CPSEs increased by more than 37 per cent to Rs 58,988 crore, exceeding the Revised Estimates (RE) goal of Rs 43,000 crore

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On Friday, the Department of Investment and Public Asset Management (DIPAM) announced that the government fell short of its disinvestment goal for FY23, the second year in a row. The deficit was close to 30 per cent, totalling Rs 35,294 crore. 

Despite this, the government has consistently increased dividends paid by Central Public Sector Enterprises (CPSEs).

Dividend receipts from CPSEs increased by more than 37 per cent to Rs 58,988 crore, exceeding the Revised Estimates (RE) goal of Rs 43,000 crore. Dividend proceeds were approximately Rs 59,294 crore in FY22.  

The government received approximately Rs 268 crore as a dividend tranche from SAIL, Rs 736 crore from Nuclear Power Corporation of India (NPCIL), Rs 102 crore from Uranium Corporation of India (UCIL), Rs 503 crore from Hindustan Aeronautics (HAL) and Rs 23 crore from Mishra Dhatu Nigam (MIDHANI), DIPAM secretary tweeted on Friday.

According to an official, the dividend goal for the next fiscal year is achievable because the CPSEs have a healthy profitability outlook for the coming fiscal. They recorded their highest profits in the last two years (2021-22 and 2022-23).

DIPAM keeps track of CPSE disinvestment revenue and dividends. The RE for these receipts was fixed at Rs 93,000 crore in FY23, but it has now been revised to Rs 94,282 crore. This is the best result in the last four fiscal years. 

The DIPAM had previously proposed that dividends from PSEs be treated as divestment collection because both were income sources for the government, according to Business Standard.

DIPAM's two separate income-generating responsibilities are dividends from PSEs (part of non-tax revenue) and disinvestment (part of miscellaneous capital receipts).

Bhagwat Kishanrao Karad, minister of state in the ministry of finance, stated in a Rajya Sabha reply that disinvestment is an ongoing process, and the execution or completion of specific transactions is dependent on market conditions, domestic and global economic outlook, geopolitical factors, investor interest and administrative feasibility. 

“Over the last few years, there have been significant uncertainties in the economic and market environment as a result of the pandemic, global economic turmoil and geopolitical tensions affecting the disinvestment process and receipts,” he added.

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disinvestment DIPAM