NEW DELHI: The center hopes to monetize underutilized infrastructure facilities, of which Rs. 88,000 in the current fiscal year (FY22) alone.
At the launch of the National Monetization Pipeline (NMP) here on Monday, Treasury Secretary Nirmala Sitharaman said projects have been identified in various sectors, including roads, railways and energy, that are expected to release an average of 1.50 million rupees per year by FY25.
The proposed monetization of assets does not include the sale of land and the government is not handing over ownership of these assets to the private sector, the FM stressed.
“It’s about the monetization of brownfield (existing) assets. Property ownership will remain with the government and there will be a mandatory return, ”she added.
The government hopes to generate income by bringing in private holdings in brownfield assets that are either languishing, not fully monetized, or not being used.
The MNP would cover 12 line departments and more than 20 asset classes, including roads, railways, ports, airports, warehouses, gas and product pipelines, energy, mining, telecommunications, stadiums, hospitality and housing.
The top 5 sectors – roads (27%), railways (25%), electricity (15%), oil and gas pipelines (8%), and telecommunications (6%) – account for 83% of total pipeline value.
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Currently, the pipeline only includes central government assets. However, the center encourages states to identify and monetize their assets and provides incentives to do so.
Niti Ayog Vice Chairman Rajiv Kumar said at the launch, “The strategic objective of the program is to unlock the value of investing in public sector assets by unlocking institutional and long-term patient capital that can then be used for further public investment can be used. “.”
The Union budget for 2021-22 identified the monetization of the operation of public infrastructure facilities as a key instrument for sustainable infrastructure financing.
Developing brownfield projects
NMP involves the monetization of brownfield projects, but not a full sale of assets.
The overall indicative value of NMP was estimated at Rs 6 lakh crore over 4 years to FY25
average realization of Rs 1.5 lakh per year.
For FY22, the government aims to realize Rs 88,000 crore through NMP.
52% rail and road together contribute 52% to the total NMP value.
Disinvestment and monetization of non-core assets such as land, buildings and pure real estate investments that are not included in the NMP.