NEW DELHI : Early last month, a directive went out from the central government to the public sector undertakings (PSUs) owned by it to pay higher dividends and not wait for the end of the financial year to do so. The Centre, as the majority shareholder of these PSUs, would be the biggest benefactor of a higher payout. Further, it asked them to consider not just current year profitability, but also dip into their financial reserves for these dividends.<\/p>\n
This dividend directive is the latest in a series of moves by the central government to monetize something from its PSUs that is essentially in the nature of a tradeoff: today\u2019s outgo in favour of the Centre will leave the PSUs relatively weaker for the future. Besides the dividend request, the Centre has been nudging PSUs to channel corporate social responsibility funds (CSR) to central government schemes. It has been asking them to do share buybacks. It has been asking one PSU to buy the government\u2019s stake in another PSU, as was the case with ONGC acquiring HPCL.<\/p>\n
As the majority owner, the Centre is within its rights to do all this. Except, most of these moves have the net effect of weakening PSUs financially, eroding their autonomy, and sending the message that the government\u2019s funding needs are an additional consideration in the business choices of PSUs.<\/p>\n","protected":false},"excerpt":{"rendered":"
NEW DELHI : Early last month, a directive went out from the central government to the public sector undertakings (PSUs) owned by it to pay higher dividends and not wait for the end of the financial year to do so. The Centre, as the majority shareholder of these PSUs, would be the biggest benefactor of a higher payout. Further, it asked them to consider not just current year profitability, but also dip into their financial reserves for these dividends. This dividend directive is the latest in a series of moves by the central government to monetize something from its PSUs […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[188,139,130],"tags":[],"class_list":["post-387274","post","type-post","status-publish","format-standard","hentry","category-civil-aviation-live-mint","category-live-mint","category-newspapers"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/387274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=387274"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/387274\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=387274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=387274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=387274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}