DIPAM asks economic affairs division to let it oversee PSU dividends

NEW DELHI: To simplify the management of public sector companies, Department of Investment and Public Asset Management (DIPAM) has sought to control dividend from public sector companies.

In a letter to the DEA Secretary Atanu Chakraborty, DIPAM has said dividend should be accounted as divestment collections and all policy related to dividend should be handled by DIPAM.

Currently, the dividend policy and its collection is handled by the economic affairs divison.


"DIPAM believes dividends and buybacks should be handled by a single department as both require deeper negotiations with PSUs based on their cash positions," a government official, who did not want to be named, told ETNOW.

Currently, PSU dividend received by the government does not make up for disinvestment proceeds.

The government is aiming to get Rs 57,486 crore in dividend from non-financial public sector companies, while it has set a divestment target of Rs 1.02 lakh crore for this financial year.

DIPAM believes it is hard to strike a balance with PSUs if dividends and buybacks are handled by two separate departments

Since it is overseen by the investment deparment now, it should handle matters such as dividends too, it said in a letter to DEA.

The government has garnered over Rs 40,000 crore from share buybacks by 33 PSUs in last two years. The government expects to do three-four more buybacks this year to meet its target.