NEW DELHI: The Indian government will likely exceed its fiscal year target for dividends from state-run companies by at least 120 billion rupees ($1.4 billion), partly offsetting an expected shortfall from share sales, a government source aware of the matter said on Thursday.

The dividend receipts could range from 550 billion rupees to as much as 600 billion rupees, the source said, potentially topping not only the government’s target of 430 billion rupees for the April-March fiscal year but also the 595 billion rupees it collected in dividends last fiscal year.

So far this fiscal, India has received 438 billion rupees in dividends from state-owned firms, according government data.

The high dividend will partly offset the shortfall in government’s revenue from sale of equity in state-run enterprises.

The government may not be able to mop up even 300 billion rupees through stake sales this fiscal year, which will be an over-40% shortfall, the source said.

Still, the government is likely to meet its fiscal deficit target of 5.9% of gross domestic product for 2023-24, as tax collection would be higher than projected, according to the source.

India’s finance ministry did not immediately respond to a mail and message sent by Reuters seeking comment.

Indian rupee direction guided by Fed outlook, RBI at start of 2024

Aditi Nayar, an economist at ICRA, expects the government’s net tax revenues to exceed the fiscal year budget target by 300 billion rupees-400 billion rupees.

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