Govt may ask PSUs to pay higher dividends

The government may demand higher dividend payouts from state-run companies should it miss revenue targets because of sluggish tax collections or lower-than-expected asset sale proceeds, two people familiar with the matter said.

- Rhik Kundu & Subhash Narayan

It may also seek special dividends from state-run oil companies, which have reported bumper profits because of soaring crude prices, one of the two people said. However, the plans will depend on the movement of crude oil prices in the coming months and the profitability of these firms.

Also, share buybacks may be sought from select public sector undertakings (PSUs) with substantial cash reserves and significant government shareholdings depending on market conditions.

The government will decide how much it wants from these companies after reviewing the September and December quarter earnings of PSUs, the person said, adding that the companies might be asked for higher dividends in the March quarter.