Over the final five years, the Union authorities has practically doubled the dividends it has obtained from public sector firms to ₹74,000 crore, with an evaluation by The Hindu exhibiting it depends closely on just a few oil, fuel, and coal firms for a big chunk of those dividends.
The evaluation of company-wise dividend knowledge from the Department of Investment and Public Asset Management (DIPAM) for the final five years reveals that five fuel-related PSUs accounted for 42% of the whole dividends the federal government has collected since the monetary yr 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 minimize in petrol costs
The knowledge additionally reveals that the 2 directly-owned public sector oil advertising firms (OMCs) — IOC and BPCL — collectively noticed a 255% improve 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 straight by the federal government.
The complete dividends from non-banking PSUs have additionally grown constantly since the COVID-19 pandemic. The authorities collected ₹39,558 crore as dividends from these firms in 2020-21, which almost doubled to ₹74,017 crore by 2024-25.
High dividends offset gradual disinvestment
According to sources within the authorities, that is due to a “calibrated” method to steadiness revenues from disinvestments and dividends.
“The government’s disinvestment policy announced during the pandemic is still very much in place, but it is not progressing as fast as it was initially hoped,” the official instructed The Hindu. “At the same time, many PSUs are turning profitable and so the government is maximising the dividends it can earn from them.”
The disinvestment coverage, formally known as the Public Sector Enterprises Policy, said that the federal government would keep 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 the 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 internet value, whichever is greater. In reality, the federal government has pushed these PSUs to pay dividends a lot greater than this obligatory quantity.
“The minimum dividend as indicated in para 5.1 above is only a minimum benchmark,” the workplace memorandum stated. “The CPSEs are advised to strive paying higher dividend taking into account relevant factors such as profitability, capex requirements with due leveraging, cash reserves and net worth.”
High payouts
IOC and BPCL noticed their mixed dividend payouts to the federal government improve 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 fuel is greater 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 lowered by ₹1.95 per litre, or 2%, over this era.
