Government Lists Out Projects For Rs 6 Lakh Crore Asset Monetisation Plan
The central government plans to raise Rs 6 lakh crore via monetisation of assets over the next four years, Finance Minister Nirmala Sitharaman said on Monday.
The asset monetisation pipeline will be spread across a number of different sectors, with individual ministries in-charge of spearheading the plan. It will be co-terminus with the National Infrastructure Plan announced by the government earlier.
The idea, according to NITI Aayog Chief Executive Amitabh Kant, is to unlock value from operational projects in order to invest in greenfield ventures and give a fillip to capital expenditure in the economy.
To make sure the economy gets necessary support from the government, we identified infrastructure as being central pillar, through which if public expenditure happens, the revival will be clearly predictable and spillover effect itself will create a cycle of demand. So, it was very clear that public expenditure in infrastructure had to be increased and also monitored.Nirmala Sitharaman, Finance Minister
The National Monetisation Pipeline will include assets of various sectors starting from roads and railways. These sectors include:
Natural Gas Pipelines
Petroleum Product Pipelines
Coal, Mineral Mining
Urban Real Estate
The government will consider assets worth Rs 1.60 lakh crore for roads, whereas in the railways sector the indicative amount is at Rs 1.52 lakh crore, government think tank NITI Aayog said.
The finance minister said only brownfield projects were being considered under the pipeline and that ownership of assets will remain with the government as there will be a mandatory hand-back by private sector.
The Asset Monetisation Pipeline has no land. It is talking about brownfield assets where investments have already been made, where there is a completed asset which is either languishing or it is not fully monetised or is under-utilised. So by bringing in private participation in this you will be able to monetise it better and ensure further investment in infrastructure building.Nirmala Sitharaman, Finance Minister
The central government also hopes to incentivise states to participate in the National Asset Monetisation Pipeline by matching 100% of the funds raised by state through divestment. In the case of funds raised through listing of state public sector units, the central government will match 50% of the funds raised. It will match 33% of the amount via monetisation of a state’s assets.
The government has also formed an empowered 'Core Group of Secretaries on Asset Monetisation' under the chairmanship of Cabinet Secretary that will review the pipeline monthly, NITI Aayog CEO Amitabh Kant said. The finance minister will review the pipeline quarterly herself, he added.
"The objective is that instead of government providing money through budgetary resources for infrastructure creation, existing infrastructure is better managed through that private sector and that will be used for more and more infrastructure creation," said Kant.