While IOC has called a board meeting on March 19 to consider paying a second interim dividend, ONGC has declined saying it does not have surplus cash to make such payments within a month of an interim dividend payout, sources with direct knowledge of the development said.

As per regulations, a company cannot declare a second dividend within a month of the previous payout and companies like ONGC would need to seek an approval of the market regulator SEBI to make such a payment.

Sources said the government is struggling to meet the revised fiscal deficit target of 3.4 per cent in view of shortfall in Goods and Services Tax (GST) collections. GST shortfall is likely to be around Rs 30,000-40,000 crore and a similar shortfall is expected in direct tax collections as well, they said.

In a regulatory filing, IOC said: "A board meeting of the company is scheduled on Tuesday, March 19, 2019...to consider declaration of 2nd interim dividend for the financial year 2018-19."

IOC had in December declared Rs 6.75 per share interim dividend alongside a Rs 4,435 crore share buyback to help the government meet its revenue targets.

ONGC had announced an interim dividend of Rs 5.25 per equity share on February 14. It too had approved a Rs 4,022 crore share buyback. Sources said ONGC has told the government that it will need a SEBI approval if it has to pay a second interim dividend within a month. Also, it does not have surplus cash after payment of interim dividend and share buyback.

Sources said the government had two years back hurriedly got SEBI nod to get PSUs like IOC to pay a second interim dividend.

Last month, while presenting the annual budget for 2019-20, the government had revised upward its fiscal deficit target to 3.4 per cent of GDP for the current fiscal year from the previously estimated 3.3 per cent budgeted target.

In absolute terms, the fiscal deficit - the gap between the Centre's expenditure and revenue - has been pegged at Rs 6.34 lakh crore. During April-January, fiscal deficit touched Rs 7.70 lakh crore, or 121.5 per cent of the budgeted target for the current fiscal year ending March 31, 2019, government data showed.

For the current fiscal, direct tax collection has been pegged at Rs 12 lakh crore while the revised estimate for GST collections has been put at Rs 6.43 lakh crore, which is lower than the targeted Rs 7.43 lakh crore.