The central government plans to raise Rs 6 lakh crore ($81 billion) over the next four years by selling the right to use its assets and through other investment avenues such as InvIT. This will help the government to fill its treasury and keep the fiscal deficit under control. As well as support the infrastructure sector in the long run.
The scheme to attract private investment in old and current assets has been named as National Monetization Pipeline (NMP). Under this plan, private sector investment will be brought in without selling road and railway properties. Airports, power transmission lines, and gas pipelines. Finance Minister Nirmala Sitharaman released its roadmap on Monday.
The National Monetization Pipeline Scheme of Rs 6 lakh crore was launched by Finance Minister Nirmala Sitamaran today. On this occasion, he said that the infra sector will play an important role in the revival of the economy. He said that the government will monetize public properties to bring them a private investment. Whatever amount will come from this will be used to increase the infrastructure of the country.
The Finance Minister said that private investment will be brought in brownfield i.e. current assets. That is, the private sector will be brought together to improve the assets which are not being fully utilized financially. The public property will not be sold and their ownership will remain with the government.
He said that under this scheme only the properties of the central government would be monetized. However, to encourage states to monetize their assets, the Center will give them incentives. They will be given a loan of 50 years without interest, for which a provision of Rs 5,000 crore has been made in the budget of this financial year.
The Finance Minister also said that if the states sell any of their companies, then the Center will give financial assistance equal to the amount received from it. If they list it in the stock market, then half of the amount received from it and if they monetize it, then the center will give 33% as assistance.
NITI Aayog CEO Amitabh Kant said on the occasion that more than 20 asset classes will be monetized under the National Monetization Pipeline. Under this, a plan has been made to raise Rs 88,000 crore in the first year i.e. in the current financial year.
He said that the top 3 sectors of NMP will include Road, Railway and Power Sector. Its objective is to recover the full cost of government investment in public property. He said that in the next four years, 15 railway stadiums, 25 airports, and the share of the central government in the existing airport, and 160 coal mines would be monetized.
Responding to a question, a government official said that the private sector would be roped in to replace those undertakings whose warehouses have become so old that they cannot be used anymore. He says that private sector investors will use them for a certain period after building the godowns and then return them back to the government.