India is expected to exceed the target for dividends of state-owned companies by at least ₹12,000 crore in FY24

The Indian government is likely to exceed its fiscal year target for dividends from state-owned companies by at least 120 billion rupees ($1.4 billion), partially offsetting an expected shortfall from share sales, a government source familiar with the matter said on Thursday.

Dividend income could be between 550 billion rupees and up to 600 billion rupees, the source said, potentially exceeding not only the government's target of 430 billion rupees for the April-March fiscal year, but also the 595 billion rupees it last set had collected dividends in the fiscal year.

India has received 438 billion rupees in dividends from state-owned companies so far this fiscal year, according to government data.

The high dividend will partially offset the state's shortfall in revenue from the sale of stakes in state-owned companies.

The government may not be able to raise even 300 billion rupees through share sales this fiscal, which would be a deficit of over 40%, the source said.

Still, the government is expected to meet its fiscal deficit target of 5.9% of gross domestic product for 2023-2024 as tax revenues would be higher than forecast, the source said.

India's finance ministry did not immediately respond to an email and message from Reuters seeking comment.

Aditi Nayar, economist at ICRA, expects the government's net tax revenue to exceed the fiscal target by Rs 300-400 billion for the fiscal year.

The Indian government collected 14.36 trillion rupees as net tax revenue in April and November, 62% of the annual target.