The government is expecting to raise up to Rs 10,000 crore (Rs 100 billion) from the special dividend it has asked 16 public sector companies, including BHEL, National Thermal Power, Natioanl Alluminium and Gas Authority, to pay this fiscal.
"The government is expecting to raise anywhere between Rs 7,000 crore (Rs 70 billion) and Rs 10,000 crore (Rs 100 billion) from 16 companies through special dividend and enhanced rate of normal dividend this fiscal," sources said.
The finance ministry has held discussions with the top executives of the 16 companies in this regard.
Today, discussions were held with executives of Hindustan Aeronautics Limited, NTPC, Power Finance Corporation, Rural Electrification Corporation, Shipping Corporation of India and Nuclear Power Corporation of India Limited.
On Friday, the officials of the ministry had met representatives of 10 companies including Oil India Ltd, Nevyeli Lignite Corporation, Coal India Limited, National Mineral Development Corporation, Mahanagar Telephone Nigam, SAIL, Gail and Nalco.
According to sources, the meetings on Friday and Monday (January 9) were held basically to assess the financial position of the profit-making PSUs, how much money they need for expansion and other purposes and how much they can give as dividend to the government.
"The objective of the meetings was to convey to them that they should not sit on idle cash. Whatever surplus they have should be put to use. The intention of the government, however, is not to squeeze them," sources added.
On November 23, 2005 the government had issued a circular asking all profit-making public sector enterprises to declare a minimum dividend on equity of 20 per cent or 20 per cent of post-tax profits, whichever is higher, subject to availability of disposable profits.
In respect of oil, petroleum, chemical and other infrastructure sectors, this amount was pegged at 30 per cent.
Besides, it had asked profit making companies with large cash surpluses and without firm plans for reinvestment to declare special dividends.
PSUs having large free reserves and sustainable profitability were told to issue bonus shares. Companies with high market price of shares were told to consider stock splits.