PSU dividends to Centre nearly double since 2020; over 40% comes from 5 gas PSUs

The evaluation of company-wise dividend information from the Department of Investment and Public Asset Management (DIPAM) for the final 5 years exhibits that 5 fuel-related PSUs accounted for 42% of the whole dividends the federal government has collected for the reason that monetary 12 months 2020-21. The evaluation excluded dividends from the Reserve Bank of India and the nationalised banks.

These firms — Coal India Ltd, Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Gail (India) — contributed ₹1.27 lakh crore, or 42.3% of the whole ₹3 lakh crore dividends the Centre obtained from non-banking PSUs between 2020-21 and 2024-25.

Minimal reduce in petrol costs

The information additionally exhibits that the 2 directly-owned public sector oil advertising firms (OMCs) — IOC and BPCL — collectively noticed a 255% enhance of their dividend payouts to the federal government since 2022-23 and a 65% lower in oil costs. However, they solely handed on a 2% lower in petrol costs to the general public.  

The third public sector OMC, Hindustan Petroleum, is owned by ONGC, and never immediately by the federal government. 

The whole dividends from non-banking PSUs have additionally grown persistently for the reason that COVID-19 pandemic. The authorities collected ₹39,558 crore as dividends from these firms in 2020-21, which just about doubled to ₹74,017 crore by 2024-25.

High dividends offset sluggish disinvestment

According to sources within the authorities, this is because of a “calibrated” strategy to stability revenues from disinvestments and dividends. 

“The authorities’s disinvestment coverage introduced in the course of the pandemic remains to be very a lot in place, however it’s not progressing as quick because it was initially hoped,” the official advised The Hindu. “At the identical time, many PSUs are turning worthwhile and so the federal government is maximising the dividends it could actually earn from them.”

The disinvestment coverage, formally known as the Public Sector Enterprises Policy, acknowledged that the federal government would preserve a minimal presence in strategic sectors and would exit from all non-strategic ones. It was first introduced as part of the federal government’s COVID-19 Atma Nirbhar Bharat bundle in May 2020.

However, since then, enhancing dividends has additionally change into part of official coverage.

Mandatory minimal dividends

An workplace memorandum despatched out by DIPAM in November 2024 to all departments of the federal government and the managing administrators of all PSUs laid out new guidelines for a way a lot dividends these firms should pay their shareholders, the biggest of which is the federal government of India.

According to the brand new guidelines, each Central PSU should pay a minimal annual dividend of 30% of its Profit After Tax (PAT) or 4% of its web price, whichever is larger. In truth, the federal government has pushed these PSUs to pay dividends a lot larger than this necessary quantity.

“The minimal dividend as indicated in para 5.1 above is simply a minimal benchmark,” the workplace memorandum mentioned. “The CPSEs are suggested to attempt paying larger dividend making an allowance for related elements equivalent to profitability, capex necessities with due leveraging, money reserves and web price.”

High payouts

IOC and BPCL noticed their mixed dividend payouts to the federal government enhance 255% between 2022-23 and 2024-25, from ₹2,435 crore to ₹8,653 crore. Dividends of OMCs are paid from their income, which themselves rise if the promoting worth of their gas is larger than the price of their inputs. 

While the value of crude oil has fallen 65% — from $116 a barrel in June 2022 to $70 a barrel in July 2025 — the retail worth of petrol has solely been diminished by ₹1.95 per litre, or 2%, over this era.