It seems that the finance ministry feels that it is not being given its pound of flesh from coal Central Public Sector Units (CPSU). The ministry has now directed the Ministry of Coal (MoC) to ensure that central guidelines, which call for a 20% minimum dividend to be declared by all profit-making CPSUs, are adhered to by coal sector entities.
- The 20% figure is calculated as a proportion of equity or post-tax profits, whichever is higher. The payout for oil, petroleum, chemical and other infrastructure sectors is stipulated as 30%.
- The finance ministry claims claims that absence of a reasonable level of dividend acts as an additional burden on the Government in the form of implicit subsidies. This is not acceptable, given the huge financial commitments, especially to the social sector, asserts the ministry.
- The coal ministry has also been asked to encourage undertakings with healthier profits to declare higher dividends, as the extant guidelines only stipulate a minimum level.
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