As revenue constrained, Centre may look at PSUs for higher dividends

NEW DELHI: The Union government may look towards its cash-rich public sector undertakings and those falling behind on their capex plans for current fiscal to declare higher dividends this year to reward their shareholders in this difficult period of Covid-19 pandemic.

Officials sources said that the PSUs with stock prices higher than their book values and those with sufficient cash may be asked to shell out higher dividends in FY21. A call will be taken after the third quarter results of companies are declared in late January or early February next year.

Also, PSUs, particularly in the oil sector, which are set to make big inventory gains due to firming up of crude prices, may also be looked at for higher interim dividends or special dividends and a few may even be considered for share buyback, depending on market conditions.

In a recent review meeting, the Finance Ministry had asked all central PSUs to step up their investment and complete 75 per cent of FY21 capex by December and more than 100 per cent by March next.

The idea is to increase the capital expenditure in order to strengthen the country's industrial growth that has slowed down in the Covid-19 period. But if the targets are not achieved, sources said, money should reach the exchequer in the form of dividends or any other instrument. (IANS)

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