Finance minister Nirmala Sitharaman on Tuesday chaired a “workshop” with leading bureaucrats of numerous infrastructure ministries and states, and stressed the value of asset monetisation as a “critical financing option for enhancing infrastructural spending”. The workshop, organised by the Niti Aayog, came days immediately after Prime Minister Narendra Modi set an ambitious asset monetisation target of Rs 2.5 lakh crore for the next 3 years.
The most recent workshop is anticipated to expedite the procedure. Given the faltering tax collection in the wake of the Covid-19 pandemic, the government has been pinning hopes on gathering non-tax revenues to be in a position to enhance spending, specially in infrastructure, and bring the Covid-ravaged economy back on its feet quick. It has currently identified about 7,000 projects National Infrastructure Pipeline, envisaging a huge investment requirement of Rs 111 lakh crore more than FY20-FY25.
“The workshop elaborated on the strategic context of core and non-core asset monetisation, along with detailed discussions on the need for and modality of such monetisation by public sector entities, and the experiences of public and private sector entities in the space,” according to an official statement. Niti Aayog chief executive Amitabh Kant highlighted the will need for closer partnership amongst central and state agencies for “leveraging the enormous resource efficiencies of the private sector and for recycling public funds for new infrastructure creation”. Top officials of numerous state-run entities also attended the workshop.
Late final month, Modi strongly pitched for a transparent and continuous procedure to privatise government assets – organizations, their physical assets and other state-owned infrastructure –, in the most unequivocal assertion of a a great deal-awaited policy shift by any head of government due to the fact Independence. “The government is moving ahead with a resolution to monetise and modernise. When the government monetises, the space is filled by the private sector. Private sector brings with itself global best practices, (which leads to) modernisation and aids the relevant sector to expand at a faster pace and create more jobs,” he had stated.
Already, the Centre has zeroed in on a clutch of assets, which includes pipelines of Indian Oil and GAIL and choose assets of Indian Railways, Delhi and Kolkata Metro rail systems and the Dedicated Rail Freight Corridor. Earlier, Niti Aayog had identified two lists of core assets, which includes 12 lots of highway bundles of 6,000 km to raise up to Rs 60,000 crore. Power Grid will provide transmission lines worth a total of Rs 20,000 crore in phases.
Even private sector participation in the operating of about 150 passenger trains and redevelopment of 50 railway stations also featured in the government’s agenda. In the Budget for FY22, Sitharaman announced that National Highways Authority of India and Power Grid Corporation each and every have sponsored one InvIT to draw investors. Five operational roads, with an estimated worth of Rs 5,000 crore are becoming transferred to the NHAI InvIT.
Similarly, transmission assets worth Rs 7,000 crore will be transferred to the PGCIL InvIT, she stated. The next lot of airports will be monetised for operations and management concession. The government has budgetted capital expenditure at Rs 5.45 lakh crore for FY22, which is 26.2% larger than the RE of FY21 and 34.5% bigger than the BE level for this fiscal.