National Monetisation Pipeline

In News 

Recently, the Union Minister for Finance & Corporate Affairs announced the launch of the National Monetisation Pipeline. 

• The National Monetisation Pipeline book will also be released.
  • The book has been prepared by Crisil Infrastructure Advisory, an arm of Crisil

Objectives and Need

• The global pandemic led to the economic crisis in the country which forced the government to increase spending to provide essential relief to vulnerable sections of society. 
• Thus, the total expenditure of the government has jumped and the revenue of the government has started shrinking. This resulted in a huge rise in borrowing.
• The government found that monetisation of government- and public sector-owned assets would be an important financing option for new infrastructure construction.

About National Monetisation Pipeline (NMP)

• The NMP is part of the FY22 Budget announcement. 
  • The Union Budget 2021-22 laid a lot of emphasis on Asset Monetisation as a means to raise innovative and alternative financing for infrastructure 
• It comprises a four-year pipeline of the Central Government’s brownfield infrastructure assets.
•  It will be providing visibility to investors and will also serve as a medium-term roadmap for the Asset Monetisation initiative of the Government.
• The pipeline has been prepared in consultation with Niti Aayog.
• It will serve as a roadmap for asset monetisation of various brownfield infrastructure assets across sectors including roads, railways, aviation, power, oil and gas, and warehousing.
• The government has also developed an asset monetisation dashboard for monitoring the real-time progress of NMP. 
• It aims to unlock the value of investment made in public assets which have not yielded appropriate or potential returns so far.

Other Steps

• Other core infrastructure assets that will be rolled out under the Asset Monetization Programme are: 
  • These include one InvIT (Infrastructure Investment Trust) each sponsored by the National Highways Authority of India (NHAI) and Power Grid (PGCIL) that will attract international and domestic institutional investors. 
  • Oil and Gas Pipelines of GAIL, IOCL and HPCL 
  • AAI Airports in Tier II and III cities
  • Other Railway Infrastructure Assets 
  • Warehousing Assets of CPSEs such as Central Warehousing Corporation and NAFED among others 
  •  Sports Stadiums.

Significance 

• It will serve as a medium-term roadmap for unlocking the value of public assets.
• It will generate returns for PSUs and generate employment.
• It can also reduce the burden of budgetary support required to strengthen the capital base of the public sector unit. 
  • The funds generated through asset monetisation can also be used for the PSUs’ technology upgrade, hence reducing the reliance on Budgetary support.
• It would help in the better financial management of government/public resources over time.

Source: PIB