National Monetisation Plan: Monetising brownfield assets and a doorway for the private sector

Finance Minister Nirmala Sitharaman unveiled the National Monetisation Pipeline (NMP) on Monday, worth an estimated 6 lakh crore. The NMP comprises the Centre's four-year strategy to monetise its brownfield infrastructure assets. The government has planned a Rs 6-trillion pipeline of monetisable assets, which would comprise a variety of assets put up for sale to the private sector.

National Monetisation Plan: Monetising brownfield assets and a doorway for the private sector [Photo- PTI]

The NMP has been introduced in order to offer a clear roadmap for monetisation and to offer venture capitalists a ready list of assets that would stimulate investment interest. 

In the next four years, the government intends to offer existing assets across sectors to private organisations in order to earn more income while also maintaining and managing the assets in a competent way. Roads, railways, and power are the top three asset monetisation sectors in terms of value, accounting for 27 percent, 25 percent, and 15 percent of the value of its total assets. 

The Road Transport and Highways Ministry and the National Highways Authority of India (NHAI) would monetize road assets worth Rs.1.60 lakh crore over four years till FY25. Toll Operate Transfer (ToT) and Infrastructure Investment Trust (IIT) are two viable models for monetising road assets, according to Amitabh Kant, CEO of Niti Aayog (InvIT). 

Over the next four years, railways will monetise assets worth over 1.52 lakh crore, including specified stations, tracks, passenger trains, and the Konkan Railway. The NMP paper stated that "The Indicative Monetisation Value is projected at 1,52,496 crores during the NMP period FY2022-25." This fiscal year, 17,810 crores will be monetised, followed by 57,222 crores in the following fiscal year (2022-23), 44,907 crores in 2022-23, and ₹32,557 crores in 2024-25. 

As part of its extensive asset monetisation strategy, the government plans to generate over 45,200 crores by monetising electricity transmission assets by FY 2025. The transmission assets that are being evaluated for monetisation during FY 2022-25 total 28,608 circuits (ckt) kilometres. 

Airports, trains, highways, ships, gas pipelines, and warehousing assets are among the 13 sectors chosen by the government. However, the government has no plans to monetise land under NPM. 

The government is constructing infrastructure at a striking rate and needs retail investor's participation to fund it. The demand is greater since India does not have a trade surplus economy, and in order to achieve one, the government must invest in high-quality upcoming infrastructure. The success of the monetisation initiative will be crucial for the resurgence of infrastructure investment in India, and it will significantly contribute to India's economic development. 

Author:  

Vasundhara Tiwari