The government has set a target of ₹1.62 lakh crore for FY23, an increase of 72% from ₹97,000 crore raised through asset monetization in FY22. Around 26,800 crore ₹ were lifted until September 15th. “The pace of monetization has slowed…The review aims to look at why this is happening and what can be done to push it,” a government official told ET. “Ministries will be pushed to speed up the process.”
A panel of senior officials can be set up to check the progress of asset monetization.
“A follow-up committee could be able to extricate ministries, departments and public sector companies from their reluctance,” added the official. The Ministry of Finance’s FY24 budget circular issued on September 7 asked ministries and departments to list asset monetization progress when presenting budget estimates for the next fiscal year.
Earlier this week, the Finance Ministry’s monthly economic report urged the government to pursue vigorous asset monetization at all levels.
Assets proposed in FY23 include highway and infrastructure investment trust (InvIT) tower packages, sports stadium redevelopment, power generation and transmission operating assets, airport leasing through public-private partnership (PPP), port trust PPP, development of silos and warehouses, and monetization of towers and mining assets.
NPM in a nutshell
In August 2021, Finance Minister Nirmala Sitharaman announced a National Monetization Pipeline (NMP) to unlock the value of infrastructure assets across all sectors of brownfield projects by engaging private sector participants or transferring rights income for a specified period. The NMP aims to raise ₹6 lakh crore through the monetization of core assets of the Center over a period of four years from FY22 to FY25. There is no outright sale of assets under the scheme.
The ₹97,000 crore raised in FY22 included PPP concessions based on Toll Operating Transfer (TOT), NHAI’s InvIT, PowerGrid’s InvIT, annual ore block and coal auctioned in FY21-22, private investment in rail settlement redevelopment, revenue from six airports leased under PPP mode, and private investment from port terminals tendered under PPP mode.
For FY23, NHAI has a target of ₹20,000 crore. However, apart from a few firsts, none of the auctions generated interest.