For the fifth consecutive financial year, dividend inflows to the national exchequer from non-financial central public sector enterprises (CPSEs) and companies where the government holds a minority stake are projected to exceed budgeted estimates. This trend is set to continue in 2025-26, with collections expected to reach a new record high.
A Cautious Stance Amid Strong Performance
Despite this anticipated outperformance, the Centre is likely to maintain its original dividend assumption of Rs 69,000 crore in the Revised Estimates for 2025-26. Government sources indicate a preference for a cautious fiscal stance due to prevailing global and domestic economic uncertainties. This conservative approach comes even as actual receipts have consistently surpassed projections in recent years.
The previous financial year, 2024-25, saw dividend earnings touch an unprecedented Rs 74,129 crore. This figure dramatically overshot both the Budget Estimate of Rs 56,260 crore and the later Revised Estimate of Rs 55,000 crore. This pattern of stronger-than-expected dividend inflows has been a crucial fiscal buffer, helping to compensate for consistently muted proceeds from the government's disinvestment programme.
Current Fiscal Year Shows Strong Momentum
Latest data from the Department of Investment and Public Asset Management (DIPAM) reveals that dividend receipts from these state-run entities have already reached Rs 44,862 crore in the ongoing financial year. This amount constitutes nearly 65% of the full-year target. Given that a significant portion of dividend payouts typically occurs in the final quarter (January-March), overall collections are widely anticipated to comfortably exceed the budgeted figure once again.
"If all goes well, dividend collections this fiscal will beat estimates again," a senior government official stated. The official highlighted that the performance of state-run oil companies in the March quarter will be a key determinant of the final tally.
Disinvestment and the Oil Sector Factor
In contrast to robust dividends, disinvestment receipts have remained weak this year, with proceeds totalling just Rs 8,768 crore so far. Notably, from 2024-25, the government discontinued setting a standalone disinvestment target. It has now adopted a combined objective covering both divestment and asset monetisation, pegged at Rs 47,000 crore for the current fiscal.
The strategic divestment of IDBI Bank is currently in progress and is expected to be concluded before the end of this financial year. However, the actual monetary inflow from this transaction is likely to be realised in the first quarter of the next financial year.
A favourable factor for public sector oil companies is the trend in global crude prices. Falling prices are expected to bolster their profitability, enabling them to maintain healthy dividend distributions to the government. While Brent crude futures saw a 2% intraday rise to $61.86 a barrel recently, prices remain nearly 17% lower than the previous year due to ample global supply. Goldman Sachs has forecast an average price of about $56 per barrel for Brent crude in 2026.
This consistent outperformance in dividend collections underscores the improved financial health and operational efficiency of many central public sector enterprises, providing the government with a stable and growing revenue stream amidst a challenging disinvestment landscape.
