CPSE’s dividend generates huge revenue for the center in FY25, and the trend is expected to continue in FY26

Dividends from Central Public Sector Enterprises (CPSEs) have turned into a consistent and robust source of income for the Center and are set to outperform disinvestment returns and are likely to exceed the budget estimate of Rs 56,000 crore for the financial year. The Union Budget 2025-26 is also likely to set an ambitious CPSE dividend target, likely to be higher than the target included in this year’s Budget.

For FY25, the Center has budgeted dividend from CPSE at Rs 56,000 crore. Official data reveals that the dividend from CPSE has already fetched Rs 48,375.77 crore. This includes dividends from 77 CPSEs, the highest being from Coal India Ltd at Rs 8,073.28 crore followed by Oil and Natural Gas Corporation of India Ltd which paid Rs 6,297.54 to the Government of India this financial year.

With CPSE seen to continue performing well, returns from dividends are seen to remain strong in the next financial year and its balance sheet could reach around Rs 60,000 crore or so, if not higher. The Centre’s new dividend policy has also mandated state-run companies to pay a minimum dividend of 30% of their after-tax profits or 4% of their net worth every year, under which every CPSE is expected to pay a minimum annual dividend of 30% of profit. After taxes or 4% of his net worth, which in effect means that the profits will continue to provide generous revenue for the center next year as well.

In past fiscal years as well, CPSE’s earnings have been strong and exceeded budgeted targets. In FY24, CPSE gave Rs 63,749.29 crore as dividend while in FY23 and FY22, it came in at just over Rs 59,000 crore.

Proceeds from quota sales have remained low so far this fiscal at around Rs 8,625.05 crore. While the Budget does not have a separate category of receipts from PSU stake sales now, it has estimated Rs 50,000 crore of “miscellaneous capital receipts” in FY25 from disinvestment and monetization of assets.