The central public sector enterprises (CPSEs) have also been suggested to rely on market borrowings for capital requirements as it would "enforce more professionalism". "keeping in view the fact that Government of India is a majority shareholder in CPSEs, it has been decided that henceforth a CPSE would pay an annual dividend of 30 percent of PAT or 30 percent of GoI's equity holding, whichever is higher," the Finance Ministry said.
Also, CPSE with 'large cash/free reserves and sustainable profit may issue bonus shares', it added while issuing the dividends payment policy for public owned companies.
The policy further said that due account should be taken of case and free reserves with the CPSE, and accordingly special dividend would "need to be paid" to the government, as a return for its equity investments.
As per the Budget Estimates for 2015-16, Rs 36,000 crore is expected to come as dividend from public sector entities during the current fiscal. The government will face a tough time in adhering to fiscal deficit target of 3.9 percent of GDP in view of likely fall in direct tax collection and low disinvestment receipt.
The 14th Finance Commission (FFC) had remarked that unlike operational matters in which the Board and management should have autonomy, transfer to reserves and payment of dividends is a policy matter which the government, as owner, should decide.


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