Receipts from disinvestment, dividend together exceeded Revised Estimate of FY23

The government on Friday said that receipts from dividend and disinvestment together have exceeded the revised estimate for Fiscal Year 2022-23 (FY23). However, realisation from disinvestment alone was less than the estimate

“Government has realised ₹94,281.86 crore as disinvestment and dividend proceeds from CPSEs as on March 31, 2023,” a senior Government official said. Revised Estimate for disinvestment and dividend proceeds together for FY 23 was ₹93,000 crore with share of dividend at ₹43,000 crore and that of disinvestment was ₹50,000 crore. The government got around ₹59,000 crore from dividends while receipts from disinvestment was little over ₹35,000 crore.

Receipts from dividend and disinvestment are shown as non tax receipt in budget. These are critical to limit the fiscal deficit for the current fiscal which is pegged at 6.4 per cent of GDP or ₹17.86-lakh crore. Higher dividend indicate recovery in the economy. However, very volatile stock market and legal disputes affected disinvestment.

According to the Finance Ministry guidelines, as announced in 2016, a CPSE would pay an annual dividend of 30 per cent PAT (Profit After Tax) or 30 per cent of government equity, whichever is higher. However, due account should be taken of cash and free reserves with the CPSE, and accordingly, special dividend would need to be paid to the government, as a return for its equity investments. Further, CPSE with large cash/ free reserves and sustainable profit may issue bonus shares.  “Any case of exception should be explained specifically by the concerned Administrative Ministry/ Department concerned to the Secretary DEA,” the guidelines said.

Since 2016, the government has given ‘in-principle’ approval for strategic disinvestment of 36 cases of PSEs and/or subsidiaries/ units/ joint ventures of PSEs/ banks. Out of the 36 cases, 33 cases are being handled by Department of Investment and Public Asset Management (DIPAM) and three cases are being handled by the respective Administrative Ministry/Department.

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