Minister of Finance and Corporate Affairs, Nirmala Sitharaman launched the asset monetisation pipeline of Central ministries and public sector entities named ‘National Monetisation pipeline’ (NMP).
- The NMP report was developed by NITI Aayog (National Institution for Transforming India) in consultation with infrastructure line ministries.
- Objective: To list out the government’s (govt) infrastructure assets that are to be sold in the next 4 years.
- The total monetisation potential under NMP through core assets of the central govt over the 4-year period (i.e. from FY22 to FY25) is estimated at Rs 6 lakh crores.
What is Monetisation?
It is the process of earning revenue from an asset business by converting the assets into cash or a form that is easily convertible into cash.
i.The Union Budget 2021-22 has identified the monetisation of operating public infrastructure assets for sustainable infrastructure financing.
ii.Hence to achieve the financing, the Budget mandated the preparation of an NMP for Brownfield Infrastructure Assets.
i.Inclusion: The NMP includes the assets of central govt line ministries and Central Public Sector Enterprises (CPSEs) in infrastructure sectors. The collation of asset pipelines from states will also be included in future.
ii.Exclusion: Monetization through disinvestment and monetization of non-core assets are not included in the NMP report.
iii.Two volumes of NMP:
- The NMP report has 2 volumes, in which, Volume I acts as a guidebook for detailing the conceptual approaches and potential models for asset monetisation.
- Volume II acts as a roadmap for monetisation, including the pipeline of core infrastructure assets under the Central Govt.
iv.The estimated value of Rs 6 lakh crores is equivalent to ~14 percent of the proposed outlay for the Centre under National Infrastructure Pipeline (NIP) (Rs 43 lakh crore).
- 15 percent of assets with a value of Rs 0.88 lakh crore are envisaged to be rolled out in FY22.
v.Sectors under the pipeline:
- The different sectors under the monetisation pipeline include roads, ports, airports, railways, warehousing, gas & product pipeline, power generation and transmission, mining, telecom, stadium, hospitality, and housing.
- The top 5 sectors are estimated to capture ~83 percent of the aggregate pipeline value. The top 5 sectors include Roads (27 percent), Railways (25 percent), Power (15 percent), oil & gas pipelines (8 percent), and Telecom (6 percent).
Participants: Vice Chairman (NITI Aayog), CEO (NITI Aayog), and Secretaries of infrastructure line ministries, Secretary (Department of Economic Affairs), and Secretary (Department of Investment and Public Asset Management) have participated in the launch.
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About Ministry of Finance:
Union Minister – Nirmala Sitharaman (Constituency – Karnataka)
Minister of State – Pankaj Chaowdhary (Constituency – Maharajganj, Uttar Pradesh), Bhagwat Kishanrao Karad (Constituency – Maharashtra)
About NITI Aayog:
Establishment – January 1, 2015
Headquarters – New Delhi
Chairperson – Prime Minister (Current – Narendra Modi)
CEO – Amitabh Kant