The Centre expects dividend receipts from non-financial Central Public Sector Enterprises (CPSEs) and its minority shareholdings to touch a record ₹80,000 crore in 2026-27, exceeding the budget estimate of ₹75,000 crore, according to two people aware of the matter.
If the estimates materialize, collections would surpass ₹78,438.07 crore collected in FY26, reflecting sustained profitability across government-owned enterprises despite continued capital expenditure commitments in key sectors, said one of the two persons cited above.
“The anticipated record payout is being driven by healthy earnings from oil and gas, coal, power, mining and infrastructure companies, coupled with the government’s policy of encouraging profitable CPSEs to maintain consistent dividend payouts while balancing their capex requirements,” said the second person. Both the persons spoke on the condition of anonymity.
Mint‘s queries emailed to the Union finance ministry and its departments—the Department of Investment and Public Asset Management (Dipam) and the Department of Public Enterprises (DPE)—on 1 July remained unanswered.
Consistent performance
Dipam has long followed a dividend policy under which CPSEs are encouraged to pay a minimum annual dividend of 30% of profit after tax or 5% of net worth, whichever is higher, subject to the financial health and investment requirements of the enterprise.
Dividend receipts from non-financial CPSEs and the minority investments have risen steadily over the past few years, reflecting the improved financial performance of public sector enterprises. The Centre collected about ₹39,750 crore in FY21, ₹59,294 crore in FY22, ₹59,533 crore in FY23, ₹64,030 crore in FY24, ₹74,128.63 crore in FY25, and ₹78,438.07 crore in FY26, showed data available on the Dipam site.
“The steady increase in dividend receipts also reflects a pattern of actual collections consistently exceeding the government’s budget estimates. The FY27 projection of around ₹80,000 crore suggests that this trend is likely to continue as several large CPSEs continue to report healthy earnings and maintain generous shareholder payouts,” the first person added.
Although collections in the current fiscal year have begun modestly at around ₹2,025 crore, the people cited above expect dividend inflows to gather pace as major CPSEs declare interim and final dividends over the course of the year.
Non-tax revenue
The Union budget has projected total receipts under the head “Dividends and Profits” at ₹3.91 trillion for FY27 (BE), higher than the ₹3.75 trillion for FY26 (revised estimates). Within this, dividends from public sector enterprises and other have been budgeted at ₹75,000 crore for FY27, compared with ₹71,000 crore (RE) for FY26.
Dividends from non-financial CPSEs, such as those in oil and gas, power, coal, mining, manufacturing, infrastructure, and other commercial sectors, primarily represent payouts from operational profits of enterprises engaged in production, services, and infrastructure activities.
These form the core of the “Dividends from public sector enterprises and other investments” head and are a key driver of the government’s non-tax revenue buoyancy.
In contrast, dividends from financial CPSEs, including nationalized banks, financial institutions, and the Reserve Bank of India, are accounted under a separate sub-head and often constitute a larger share of the overall “Dividends and Profits” category. For example, surplus transfers and bank dividends pushed total dividends and profits to ₹3,08,424 crore in FY24-25 actuals.
“The fact that non-financial PSUs are earning profits and paying dividends to the government is a positive development. It means they are supporting the government’s finances while also enhancing shareholder value,” said Madan Sabnavis, chief economist at Bank of Baroda.
“The current year has seen expenditure rise due to the West Asia war and the possibility of lower agricultural output affecting consumer spending. Higher dividend receipts will strengthen non-tax revenue and make it an important contributor to the government’s overall revenue generation,” he added.