Page 87 - economic_survey_2021-2022

Fiscal Developments 61

Asset Monetization

The National Infrastructure Pipeline (NIP) envisaged a projectd infrastructure investment of
` 111 lakh crores during FY 2020 to FY 2025. The NIP task force report has estimated that about
15-17 per cent of this outlay is to be met through innovative and alternative initiatives such as
asset monetisation, funding through a new Development Finance Institution (DFI) etc . The Union
2
Budget 2021-22 also emphasized monetization of assets as one of the three pillars for enhanced and
sustainable infrastructure financing in the country.

Based on the mandate for Asset Monetisation under Union Budget 2021-22, the National
Monetisation Pipeline (NMP) has been developed by NITI Aayog in consultation with infrastructure
line ministries. It is envisaged to serve as an essential roadmap for the asset monetisation of various
brownfield infrastructure assets across roads, railways, shipping, aviation, power, telecom, oil & gas,
and warehousing sectors. The NMP will also form a baseline for the asset owning ministries for
monitoring and tracking performance of the potential assets.

The NMP estimates aggregate monetisation potential of ` 6.0 lakh crores through core assets of the
Central Government, over a four-year period, from FY 2022 to FY 2025. The top 5 sectors which
capture around 83 per cent of the aggregate pipeline value include: Roads (27 per cent) followed by
Railways (25 per cent), Power (15 per cent), oil & gas pipelines (8 per cent) and Telecom (6 per cent).
Around 15 per cent of assets with an indicative value of ` 0.88 lakh crore are envisaged to be rolled
out in the current financial year (FY 2021-22).

The assets and transactions identified under the NMP are expected to be rolled out through a range
of instruments. These include direct contractual instruments such as public private partnership
concessions and capital market instruments such as Infrastructure Investment Trusts (InvIT)
among others. The choice of instrument will be determined by the sector, nature of asset, timing of
transactions (including market considerations), target investor profile and the level of operational/
investment control envisaged to be retained by the asset owner etc.

While the monetization of core assets is steered by NITI Aayog, the initiative for monetization of non-
core assets has been hitherto steered by the Department of Investment and Public Asset Management
(DIPAM). Monetization of non-core assets envisages unlocking of value of these thus far unutilized
or underutilized assets and generate returns on the equity that the Government has invested in them.
So far, CPSEs have referred ~3400 acres of land and other non-core assets to DIPAM/MoF for
monetization. Monetization of non-core assets of different CPSEs i.e., MTNL, BSNL, BPCL, B&R,
BEML, HMT Ltd, Instrumentation Ltd etc. is at present under various stages of the transaction.

Since, at present, the desired skill set to take on the responsibility of management and monetization
of non-core assets in Government is limited. Hon’ble Finance Minister in her Budget speech 2021-22
announced setting up of a Special Purpose Vehicle (SPV), with capacity and expertise, to carry out
the monetization of the land and other non-core assets in an efficient and prudent manner, in line with
international best practices. In pursuance of the Budget announcement, ‘National Land Monetisation
Corporation’ (NLMC) is being incorporated as a 100 per cent Govt of India owned entity with an
initial authorized share capital of ` 5000 crores and subscribed share capital of ` 150 crores.

2 Monetisation Guidebook Volume 1, National Monetisation Pipeline, NITI Aayog.