Turning On The Money Tap
THE WEEK|September 12, 2021
Planning and execution will be key to realising the ambitious goals of the national monetisation pipeline
Pratul Sharma

PRIME MINISTER Narendra Modi often asks ministers to think big, and deliver even bigger results. Scale defines his public policy initiatives. True to form, the Modi government is embarking on an ambitious project: unlocking the potential value of government assets and raising around ₹6 lakh crore in four years. The money will fund infrastructure, create jobs and give a booster shot to the sluggish economy.

The big-ticket plan involves the creation of new sources of revenue by leasing of underutilised public assets to private-sector players. To better understand what it means, think of the government as an individual who is struggling to maintain or make money from his property. He decides to lease out the assets for a specified number of years in exchange for an amount paid up front. The property does not change hands, but the tenant can invest in it to generate revenue while discharging his duty to maintain the property.

The national monetisation pipeline, recently unveiled by Finance Minister Nirmala Sitharaman, takes this middle-of-the-road approach to monetising public assets. It stops short of the stigmatised avenues of privatisation and disinvestment, both of which involve selling assets, and focuses instead on ensuring “private participation” in managing assets in a more efficient and profitable manner. It means the government will give up control over 20 asset classes— ranging from highways, railways and power transmission lines to hotels, telecom facilities and stadiums.

The list of such assets is quite long. It includes 25 airports, 400 railway stations, 90 trains, four hill railways, more than 26,000 kilometres of highways, around 28,000 circuit kilometres of power lines, more than 8,000 kilometres of natural gas lines, around three lakh kilometres of optical fibre cables, cell phone tower assets numbering around 15,000, hotels owned by the Indian Tourism Development Corporation, ports, coal projects and stadiums under the Sports Authority of India. As much as 81 per cent of the aggregate value of the monetisation pipeline comes from five sectors—roads (27 per cent), railways (25), power (15), oil and gas (8) and telecom (6).

The government intends to raise ₹88,000 crore in the current fiscal. The corpus of ₹6 lakh crore to be raised over four years will fund the national infrastructure pipeline, which Modi had announced in 2019 as an umbrella body of projects that will together cost ₹100 lakh crore.

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