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New Delhi : Union Finance and Corporate Affairs Minister Nirmala Sitharaman on August 23, 2021, launched the asset monetisation pipeline of Central ministries and public sector entities: ‘National Monetisation Pipeline (NMP Volumes 1 & 2)’. The pipeline has been developed by NITI Aayog in consultation with infrastructure line ministries based on the mandate for ‘Asset Monetisation’ under Union Budget 2021-22. NMP estimates aggregate monetisation potential of Rs 6.0 lakh crore through core assets of the Central Government over a four-year period from FY 2022 to FY 2025.
Volumes 1 and 2 of the report on NMP was released on August 23 in the presence of Vice Chairman (NITI Aayog), CEO (NITI Aayog), and Secretaries of infrastructure line ministries included under the pipeline—Roads, Transport and Highways, Railways, Power, Pipeline and Natural Gas, Civil Aviation, Shipping Ports and Waterways, Telecommunications, Food and Public Distribution, Mining, Coal and Housing and Urban Affairs—along with Secretary (Department of Economic Affairs) and Secretary (Department of Investment and Public Asset Management).
Sitharaman while launching the pipeline, said, “The Asset Monetisation programme has taken shape because of the vision of our Prime Minister who has always believed in universal access to high-quality and affordable infrastructure to the common citizen of India. Asset monetisation, based on the philosophy of Creation through Monetisation, is aimed at tapping private sector investment for new infrastructure creation. This is necessary for creating employment opportunities, thereby enabling high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare.”
She further enumerated the reforms and initiatives undertaken by the current Government towards accelerated infrastructure development and for incentivising private sector investments. This included the recent ‘Scheme of Financial Assistance to States for Capital Expenditure’, which incentivises State Governments to recycle State Government-owned asset for fast-tracking greenfield infrastructure, according to a PIB release.
“The strategic objective of the programme is to unlock the value of investments in brownfield public sector assets by tapping institutional and long-term capital, which can thereafter be leveraged for further public investments,” Vice Chairman, NITI Aayog, said during the launch. He emphasized on the modality of such unlocking, which is envisaged to be by way of structured contractual partnership as against privatisation or slump sale of assets.
NMP is envisaged to serve as a medium-term roadmap for identifying potential monetisation- ready projects, across various infrastructure sectors. CEO, NITI Aayog said, “The NMP is aimed at creating a systematic and transparent mechanism for public authorities to monitor the performance of the initiative and for investors to plan their future activities. Asset Monetisation needs to be viewed not just as a funding mechanism, but as an overall paradigm shift in infrastructure operations, augmentation and maintenance considering private sector’s resource efficiencies and its ability to dynamically adapt to the evolving global and economic reality. New models like Infrastructure Investment Trusts & Real Estate Investment Trusts will enable not just financial and strategic investors but also common people to participate in this asset class thereby opening new avenues for investment. I hence consider the NMP document to be a critical step towards making India’s Infrastructure truly world class.”
NMP is a culmination of insights, feedback and experiences consolidated through multi-stakeholder consultations undertaken by NITI Aayog, Ministry of Finance and line ministries. Several rounds of discussion have been held by NITI Aayog with the stakeholders.
Secretaries of all infrastructure ministries affirmed their resolve towards achieving their respective targets set under NMP, working jointly with NITI Aayog and Ministry of Finance.
As part of a multi-layer institutional mechanism for overall implementation and monitoring of the Asset Monetisation programme, an empowered Core Group of Secretaries on Asset Monetization (CGAM) under the chairmanship of Cabinet Secretary has been constituted, according to a PIB release.
Union Budget 2021-22 has identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing. Towards this, the Budget provided for preparation of a ‘National Monetisation Pipeline (NMP)’ of potential brownfield infrastructure assets. NITI Aayog in consultation with infra line ministries has prepared the report on NMP. NMP aims to provide a medium term roadmap of the programme for public asset owners along with visibility on potential assets to private sector.