Asset Monetisation Target for FY22 Exceeded

National Monetisation Pipeline UPSC: Relevance

• GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Asset Monetisation: Context

• Recently, Ministry of Finance has reviewed the progress made by several ministries, besides informing that the asset monetisation target for FY22 was surpassed.

वित्त वर्ष 2022 के लिए परिसंपत्ति मुद्रीकरण लक्ष्य  को पार कर गया

Asset monetisation pipeline: Key points

• FY22: Asset monetisation worth Rs.96000 was completed against the target of Rs 88,000 crore.
• FY23: A goal of asset monetisation worth Rs 1.62 trillion was set, and a pipeline of assets worth Rs 1.6 trillion is already under advanced stages of implementation.
• In FY22, asset monetisation was led by the roads, power, coal and mining ministries.

Asset monetisation in different ministries

Asset monetisation in transportation

• The Ministry of Roads, Transport and Highways has monetised assets worth Rs 23,000 crore, which included a 390-km stretch through InvIT (Infrastructure Investment Trust) and three ToT (Toll Operate Transfer) bundles.

Asset monetisation in power

• The Ministry of Power monetised assets of Rs 9,500 crore with PowerGrid Corporation’s InvIT and NHPC’s securitisation of its operational hydel assets.

Asset monetisation in coal

• Ministry of Coal was able to monetise assets worth Rs 40,000 crore due to opening up of coal mining for the private sector, and steps taken to boost domestic coal production.

Asset monetisation in railways

• The Ministry of Railways has been a laggard, and was able to monetise assets worth Rs 800-900 crore against its target of around Rs 18,000 crore.

What is asset monetisation pipeline?

• National Monetization Pipeline is about those brownfield assets where investment is already being made, but have assets that are either languishing or not fully monetized or under-utilized.
• These assets will be monetized and the amount received will be used for further infrastructure building.

About asset monetisation pipeline

• Union Budget 2021-22 has identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing.
• Monetization through disinvestment and monetization of non-core assets (such as land, building, and pure play real estate assets) have not been included in the National Monetization Pipeline (NMP).
• The aggregate asset pipeline under NMP over the four-year period, FY 2022-2025, is indicatively valued at Rs 6.0 lakh crore.
• The estimated value corresponds to 14% of the proposed outlay for Centre under NIP (National Infrastructure Pipeline).
• The sectors included are roads, ports, airports, railways, warehousing, gas & product pipeline, power generation and transmission, mining, telecom, stadium, hospitality and housing.
• The top 5 sectors (by estimated value) capture 83% of the aggregate pipeline value.

Benefits of National Monetization Pipeline

• It will provide universal access to high-quality and affordable infrastructure to the common citizen of India.
• It is aimed at tapping private sector investment for new infrastructure creation.
• It will create new employment opportunities, which will result in high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare.

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