In his Budget speech, Finance Minister P Chidambaram had proposed to raise dividend distribution tax for companies from 12.5 per cent to 15 per cent.  Market participants were shocked at the Budget proposal to hike the dividend distribution tax.

Just two days after this proposal, over a dozen companies have already announced their board meetings to consider payment of interim dividends.

Mukesh Ambani-led Reliance Industrial Infrastructure, IPCL, Banco Products, FDC, KCP, Bajaj Electricals, Mirc Electronics and India Motor Parts are among the other companies, which will be holding board meetings later this month to consider the dividend payouts.

FMCG majors Nestle, Colgate Palmolive, Nalco, Wockhardt and Sun Pharmaceuticals, Goldiam international, DMC International, Esab India, Grindwell Norton, Navneet Publications, Ultramarine and Pigments are among the others who are rushing in for giving the interim dividends.

Godawari Power and Ispat Ltd has already declared a payment of 10 per cent interim dividend - that is Re 1 on shares of Rs 10 each for the year 2006-07.

State-run Steel Authority of India Limited paid an interim dividend of Rs 567.15 crore (Rs 5.67 billion) to the government.

The company announced an interim dividend at the rate of 16 per cent on the paid up equity amounting to Rs 660.86 crore (Rs 6.60 billion). The company has also paid a dividend tax of Rs 92.69 crore (Rs 926.9 billion) to the government during the nine-month period ending December 31 last year.

Foods & Inns Board has agreed to give 12 per cent dividend to shareholders for the year ended September 30, 2006. The company will declare the dividend at an Annual General Meeting on March 28.

Greaves Cotton, part of Thapar group and engaged in the manufacture of engines and infrastructure equipment, on Tuesday said a meeting of the board of directors will be held on March 16 to consider declaration of third interim dividend for the financial year 2006-07. The company had declared an interim second of Rs 2 per share.

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With inputs from PTI