Earlier this week, the union government unveiled the National Monetisation Pipeline (NMP), through which several national infrastructure assets are being monetised. The plan lists the assets that will be monetised through leasing in the next four years. Expectedly, the Congress party has launched an attack on the scheme, alleging the Modi government of selling the country to crony capitalists.
In his first tweet after his Twitter account was restored, Rahul Gandhi criticised the move terming it as ‘Rashtriya Mitrikaran Yojana’, implying it is a scheme to benefit few friends of PM Modi.
Continuing with his familiar rant, the Kerala MP said that these assets have been built over 70 years and they are being handed over to 3-4 industrialists as gifts, even though the scheme has only been announced and no asset has been handed over to anyone yet.
The Congress party has posted several tweets alleging that national assets are being sold to the friends of PM Modi. They alleged that everything is being sold to the friends of the Prime Minister at cheap rates.
They termed it Monsoon Offer Sale for the friends of BJP, where national assets are being sold at discounted rates.
However, as always, the allegations of the Congress party are completely false and baseless. First, the plan was announced only on Monday, and it is too soon for any asset to monetised in just one week. The scheme will go through detailed tendering processes, where the higher bidders will be able to acquire the monetised assets. At present, nobody knows which company will win which infrastructure.
Therefore, it is more than premature for the Congress party to allege that the plan is designed to benefit Modi’s friends. But this is not the only falsehood being spread by Rahul Gandhi and his party, most of the allegations they are levelling are false.
Contrary to the Congress claim that the Modi govt is selling not just land but also the air, actually, land assets are not included in the monetisation pipeline. Only brownfield assets will be monetised to unlock their value.
The most important point of the scheme is that the assets will not be handed over to the private sector forever, and their ownership will remain with the government. The assets are being leased out, and after the expiry of the lease period, the assets will be mandatorily taken back by the government.
The government has made it clear that only ‘rights’ of the assets are being monetised, not the ‘ownership’. The Asset Monetisation Pipeline does not even include monetisation through disinvestment and monetization of non-core assets such as land and real estate, therefore, it does not including ‘selling’ of anything.
Therefore, the union government is not selling the assets, but only leasing them to generate cash, which is needed for various development and welfare activities. The funds raised from the monetisation of the assents will be used for further augmentation of and maintenance of infrastructure, therefore, it will lead to improvement of the infrastructure in the country.
The National Monetisation Pipeline, developed by NITI Ayog, has identified infrastructure assets including roads, ports, airports, telecom, railways, warehousing, energy pipelines, power generation, power transmission, hospitality and sports stadiums for monetisation. Apart from these, assets from mining and housing redevelopment sectors have also been identified.
Highways and Railways will contribute the most value through the plan, followed by power, oil & gas pipelines, and Telecom, which constitute the top 5 sectors.
Even though the pipeline has been announced now, the monetisation program of infrastructure is already going on in several sector. For example, the public-private partnership is already widely used in the Highway sector. NHAI has started the Infrastructure Investment Trust (InvIT) for monetisation of Highways and plans to offer 19 projects worth Rs 35,000 crore under this model.
Under this model, the assets are placed in an InvIT in which investors invest money, and the income generated from such assets is paid as dividends to the investors.
Asset monetisation in Railways is also going on with Railway stations, good sheds, freight corridors etc being handed over to private players. The Railways is also in the process of allowing the private sector to run passenger trains.
Similarly, public power transmission and telecom companies have established extensive infrastructure which can be monetised and their value can be unlocked. Powergrid has already monetised some of its transmission lines, and BSNL and MTNL have cellular transmission towers and fibre optic networks which will be offered for monetisation.
Ownership of all these monetised assets will remain with the government, as they will be handed over to the private partners only on long term lease basis under various models of PPP, like BOT (Built Operate Transfer), ROT (Rent Operate Transfer) etc. The assets will be leased for various periods ranging from 4 to 10 years. After the expiry of the leases, the assets will return to the govt, if the lease is not renewed.
The govt is generating money from these assets without outright selling them, contrary to what the Congress party is claiming. The Indian government plans to raise ₹6 lakh crore in the next 4 years through monetisation of assets, in the 2022-2025 period.
The NMP is in line with Prime Minister Narendra Modi’s strategic divestment policy, under which the government will retain presence in only a few identified sectors, in line with “Minimum Government, Maximum Governance”, and the rest will be handed over to the private sector to operate them. This asset monetisation will unlock resources which will lead to value unlocking of underutilised brownfield assets which have been languishing for decades. This will also create productivity gains in the concerned sectors.
The objective of the asset monetization programme is to unlock the value of investment made in public assets which have not yielded appropriate or potential returns so far. It is designed to serve as a medium-term roadmap for identifying potential monetisation ready projects across various infrastructure sectors.
The National Infrastructure Pipeline (NIP) seeks to create infrastructure assets of Rs 111 lakh crore in the next few years. Given this huge funding requirement, the govt has come up with the Asset Monetisation Pipeline to partly fund it.