Asset Monetisation Plan Worth Rs 6 Lakh Crore In The Offing: DIPAM Secretary

India is working on a Rs 6-lakh-crore asset monetisation plan that will include pipelines of Power Grid Corp. to national highways, according to Tuhin Kanta Pandey, head of the department that manages the government’s holdings in companies.

“[The] national monetisation plan will have a range of assets from Power Grid pipeline to national highways, toll operate transfer,” the secretary at the Department of Investment and Public Asset Management said at an event organised by the Confederation of Indian Industry on Wednesday. “On the asset monetisation side, we have the Power Grid InvIT that was successfully done. It is a very important first one where a lot of regulatory systems have been put in place in terms of SEBI approvals, in terms of how to go about it.”

Pandey said, “This is one place where we have a lot of strength to go on a faster pace. Second InvIT on the Gas Authority of India Ltd. side is in the pipeline. There is a big asset monetisation pipeline where private sector participation is expected.”

NITI Aayog is supervising the National Monetisation Pipeline of potential brownfield infrastructure assets. The monetisation pipeline has been created for a four-year period from FY22 to FY25.

Pandey also said that India’s divestment agenda has been put on fast track after being hit by the second wave of the Covid-19 pandemic in April and May.

The government expects to conclude the initial public offering of Life Insurance Corp. of India as well as big-ticket strategic sales of Air India Ltd. and Bharat Petroleum Corp. in the current fiscal, he said.

According to the DIPAM website, the government has so far garnered Rs 8,368.6 crore in disinvestment receipts and another Rs 573.4 crore in dividend receipts. The budget target for disinvestments in FY22 has been set at Rs 1.75 lakh crore.

Here are some of the key highlights from Pandey’s interaction:

• You will see a lot of privatisations under new PSU Policy in the coming five years.

• The government is talking about closure of public sector units that cannot be disinvested openly.

• Seen sufficient interest for Pawan Hans, BEML, Shipping Corp. of India, Neelachal Ispat Nigam Ltd. from bidders.

• Hope to complete the due diligence for above within FY22.

• Expect expression of interest for Concor disinvestment as soon as land lease policy is finalised.

• Expecting dividend of about Rs 50,000 crore from central public sector enterprises alone.

• Need to balance disinvestments, dividends and privatisation.

Revenue Secretary Tarun Bajaj, who was also present at the same event, said the government was following a policy of stability and predictability in its taxation regime. The government, he said, would follow the same policy on tinkering of rates under the goods and services tax regime for now.

India has collected net tax revenue of Rs 4.1 lakh crore during the first three months of the ongoing fiscal—that's 26.7% of the budget estimate compared with 8.2% in the quarter ended June 2020.

Here are some of the highlights from Bajaj’s interaction:

• Our revenues were not as bad as anticipated.

• See robust tax revenues coming in for Q1.

• Better revenues on account of corporate sector doing better.

• Pandemic has resulted in the formalisation of the economy that’s reflected in tax revenues.

• Have to look at solutions to bring down rates that are very high under the GST.

• Have to take out certain items that are exempted from GST at the same time.

• Need to address issue of inverted duty structure in the GST.

• Acknowledge GST rate high on auto, especially for four-wheelers.

• GST rate on auto to stay the same for now.

• Don’t see private investment happening too much.

• Need private investments for sustained economic growth.