Central Govt raises Rs 1tn via Asset Monetization in FY22, beats target by 12%

Under the National Monetisation Pipeline (NMP) i.e. Central Government’s asset monetization, the public sector brownfield asset generated revenues and investments worth Rs 1 trillion (tn), 12% more than the target set for FY22. In aggregate, revenues and investments mobilized from asset monetization in FY22 stood at Rs 96,000 crore, which will go up by at least Rs 4,000 crore after some additional data.

• This is due to the robust performance of the coal and mineral blocks, highway stretches and power transmission lines.

Points to be noted:

i.The government has set a target of Rs 6 lakh crore (6 trillion) through 4-year National Monetisation Pipeline (NMP)/asset monetization in FY22-25. 

ii.The monetisation target was Rs 88,200 crore for FY22.

iii.FY23 target is at Rs 1.67 lakh crore.

iv.Here, the Brownfield assets are those which the Central government leases to private entities for the launch a new production activity.

Monetization in Different Sectors  in FY22:

i.Coal and mineral mining block auctions led the monetization in FY22 with Rs 58,700 crore.

• Coal contributed Rs 40,000 crore and other mines Rs 18,700 crore as against an annual target of just 3,394 crore.
• Opening up of the coal mining sector to the private sector helped in the auction of 22 coal blocks, etc. 
• Besides coal, various easing processes helped in the auction of 31 mineral blocks (bauxite, copper, limestone, iron ore etc).

ii.The ministry of roads has achieved Rs 23,000 crore by monetizing 390 km of roads under Infrastructure Investment Trusts (InvITs) and Transfer-Operate-Transfer (TOT) models, as against the FY22 target of Rs 30,000 crore. 

iii.Ministry of power monetized assets worth Rs 9,500 crore compared with the target of Rs 10,470 crore in FY22. 

iv.Railways, along with the NHAI (National Highways Authority of India) has collected just Rs 800 crore via monetisation in FY22 as against the target of Rs 17,810 crore. 

Recent Related News:

The Central Government has set a target of Rs 1-trillion for the new Development Finance Institution (DFI) namely ‘National Bank for Financial Infrastructure and Development (NaBFID)’ for sanctioning loans to the infrastructure sector in FY23. It will start its operations in Q1FY23.

What is the National Monetisation Pipeline? 

In August 2021, Government of India announced a 4-year (FY22-25) asset monetization plan i.e. National Monetisation Pipeline (NMP) wherein existing public Brownfield assets in sectors such as roads, railways, power, oil and gas pipelines, telecom, civil aviation etc. will be leased to the private sector worth Rs. 6 trillion.

• It is Monetization of ‘Rights’ not ‘Ownership’. 

• Click here to read about NMP