Union Budget 2026: Centre’s dividend kitty may beat budget estimates in FY26

Union Budget: The government’s dividend collections from non-financial central public sector enterprises (CPSEs) and entities where it holds minority stakes may exceed the budgeted target for a fifth consecutive year in 2025-26 and scale a fresh high, people aware of the matter said.

Even so, the Centre will likely stick to its initial dividend projection of Rs 69,000 crore in the revised estimate for 2025-26, choosing to remain conservative amid global and domestic uncertainties, one of the people said.

According to the latest data from the Department of Investment and Public Asset Management (DIPAM), dividend collections from these entities have reached Rs 44,862 crore so far in the current fiscal, which are about 65% of the full-year target. A substantial portion of dividends typically flows in the March quarter, raising expectations that total collections will overshoot the budgeted level.

In 2024-25, the government garnered a record Rs 74,129 crore in dividends from these entities, sharply exceeding the initial budgetary target of Rs 56,260 crore and the revised estimate of Rs 55,000 crore. Consistently higher-than-budgeted dividend inflows have helped cushion the impact of weak disinvestment receipts in recent years, apart from reflecting strong performance by CPSEs.

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The disinvestment revenue, meanwhile, remains subdued, at Rs 8,768 crore so far this fiscal. The government has stopped declaring a separate disinvestment target since 2024-25. Instead, it has announced a combined divestment and asset monetisation goal of Rs 47,000 crore for the current fiscal.

The strategic sale process of IDBI Bank is in progress and the government expects to wrap it up by the end of this fiscal. However, the actual sale proceeds may be accrued in the first quarter of the next fiscal.

“If all goes well, dividend collections this fiscal will beat estimates again,” a senior government official said. “Much will depend on the performance of state-run oil companies in the March quarter.”

Lower global crude oil prices are expected to support the earnings of state-owned oil companies, enabling them to sustain healthy dividend payouts.

Brent crude oil futures rose about 2% in intraday trade on Monday to $61.86 per barrel, still down about 17% from a year ago amid ample global supply, although an elusive deal to end the Ukraine war keeps investors on edge. Goldman Sachs last week projected Brent prices to average $56 per barrel in 2026.