The government wants oil companies to pay Rs 34,000 crore in dividend , profit petroleum and royalty in this financial year, about 15% more than they did last year, in a bid to raise resources for public spending amid economic slowdown and corporate tax cut.The finance ministry recently conveyed to the petroleum and natural gas ministry that state-run oil companies would need to step up dividend payout this year, which will increase overall revenue receipt from the oil sector and help the government meet its revenue target, said people aware of the matter.The target of Rs 34,000 crore was fixed ahead of last week’s decision to cut corporate tax rate, which is expected to leave a Rs 1.45 lakh crore revenue gap for the government this fiscal. This target may be revised upwards soon and companies will be expected to pay a higher dividend and return to shareholders almost all the additional profit they make from tax cuts, said the people. Officials at the two ministries will soon begin discussions with company executives on the contribution each firm can make.The target includes dividend from state-run oil companies, profit petroleum and royalty from offshore oil and gas fields, and petroleum licensing fee.In 2018-19, the comparative figure was about Rs 29,000 crore, almost half of which came from dividends by state oil companies. Profit petroleum and royalty made up the balance, with a small contribution from licensing fee.Last year, ONGC, Indian Oil Corporation and Oil India undertook a combined Rs 9,500 crore share buyback programme, which allowed the government to offload shares in these companies.Officials believe that since there is no such buyback planned this year, oil companies can return a similar amount to shareholders in the form of dividend, according to the people cited earlier.Lower oil prices and declining domestic production may lead to a decline in the government’s income from profit petroleum and royalty this year. Therefore, the share of dividend will have to rise to meet the government’s oil revenue target.The average Indian basket crude oil price is down about $5 a barrel this year from $70 in 2018-19. Local output of crude oil is down 6% in five months through August from a year ago while gas production is 1% lower.In2018-19, higher prices and a weaker rupee helped ONGC register a record annual profit of Rs 26,700 crore even though its oil production had declined.Resource-rich oil companies have been a big contributor to the states’ revenue for several years. The petroleum sector contributed Rs 595,000 crore to state and central exchequers in 2018-19.