By Subhash Narayan New Delhi, Dec 6 : The Union government may look towards its cash-rich public sector undertakings and those falling behind on their capex plans for current fiscal to declare higher dividends this year to reward their shareholders in this difficult period of Covid-19 pandemic. Officials sources said that the PSUs with stock prices higher than their book values and those with sufficient cash may be asked to shell out higher dividends in FY21. A call will be taken after the third quarter results of companies are declared in late January or early February next year. Also, PSUs, particularly in the oil sector, which are set to make big inventory gains due to firming up of crude prices, may also be looked at for higher interim dividends or special dividends and a few may even be considered for share buyback, depending on market conditions. In a recent review meeting, the Finance Ministry had asked all central PSUs to step up their investment and complete 75 per cent of FY21 capex by December and more than 100 per cent by March next. The idea is to increase the capital expenditure in order to strengthen the country's industrial growth that has slowed down in the Covid-19 period. But if the targets are not achieved, sources said, money should reach the exchequer in the form of dividends or any other instrument. With the central government the largest shareholders in PSUs, higher dividends would largely help it to fill its coffers at a time when revenue is constrained due to a overall fall in economic activity during the pandemic while expenditure has risen sharply. Dividends from non-financial PSUs have been budgeted at Rs 65,747 crore in FY21. Any increase in this amount will give a boost to non-tax revenue of the government and help it bridge the rising fiscal deficit that as per the initial estimates is now pegged close to 8 per cent of GDP. Union Finance Minister Nirmala Sitharaman and her predecessors, including late Arun Jaitley and P Chidambaram, have maintained the policy of advising non-financial state-owned companies that if they are not utilising their cash reserves for capex needs, they should give it to the Centre through dividends or share buybacks. As per the guidelines issued by disinvestment department DIPAM, every CPSE is required to pay a minimum annual dividend of 30% of PAT or 5% of the net worth, whichever is higher. While the government is looking at its PSUs for investments and dividend, the companies are finding it difficult to meet capex targets, given the financial and project implementation constraints. Officials of a few PSUs said that Covid-19 had severely dented the demand and slowed implementation of projects. Consequently, there is a already strain on their resources that would get further heightened if additional dividends were to be paid. Several PSUs in power and mining space have completed just about 40 per cent of their annual capex by November due to constrained business environment. (Subhash Narayan can be reached at subhash.n@ians. in) /IANS