New Delhi: The Centre expects dividend receipts in FY27 from non-financial central public sector enterprises (CPSEs) and its minority shareholdings to touch a record ₹80,000 crore, offering a modest cushion to its fiscal math, according to two people aware of the matter.
If the projections hold, receipts would exceed both the FY27 Budget estimate of ₹75,000 crore and last year’s record ₹78,438 crore, reflecting the sustained profitability of government-owned enterprises despite continued capital expenditure commitments.
“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,” one of the persons cited above said on the condition of anonymity.
The department of investment and public asset management (Dipam) has long followed a 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.
On the back of this policy, dividend receipts from non-financial CPSEs and the Centre's minority investments have risen steadily over the past few years, from about ₹39,750 crore in FY21 to ₹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 second person said, also requesting anonymity.
“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,” this 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.
The additional non-tax revenue of ₹5,000 crore—while tiny relative to the Centre's ₹16.96 trillion fiscal deficit target for FY27, or 4.3% of GDP—could provide a small buffer against higher expenditure or revenue shortfalls.
“The outperformance on dividend revenue collection provides some comfort on the fiscal side,” said Gura Sen Gupta, chief economist of IDFC First Bank, adding that risks still exist from revenue foregone due to the excise duty cut on petrol and diesel. “Subsidy expenditure could exceed BE due to elevated crude oil prices in Q1. That said, the fall in crude oil prices has reduced the fiscal slippage risks.”
Mint's queries emailed to the Union finance ministry and its departments—Dipam and the Department of Public Enterprises (DPE)—on 1 July remained unanswered.
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 non-financial public sector enterprises and other investments have been budgeted at ₹75,000 crore for FY27. The remaining ₹3.16 trillion is expected to come largely from the Reserve Bank of India, public sector banks and other financial institutions.
Like non-financial CPSEs, financial state-owned enterprises, too, exceeded their budgeted estimate in FY26, with ₹2.87 trillion in dividend transfers from RBI, nationalised banks & financial institutions, compared to the BE of ₹2.56 trillion.
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, and are a key driver of the government's non-tax revenue buoyancy.
“The current year has seen expenditure rise due to the West Asia war and the possibility of lower agricultural output affecting consumer spending,” said Madan Sabnavis, chief economist at Bank of Baroda. “Higher dividend receipts will strengthen non-tax revenue and make it an important contributor to the government's overall revenue generation.”
India’s fiscal deficit target for FY27, at ₹16.96 trillion, is at 4.3% of GDP, an improvement from the 4.4% (revised estimate) in FY26. So far, in April–May, the deficit stood at ₹1.62 trillion, or 9.6% of the budget estimate.