Friday, August 27, 2021

What is the National Monetization Pipeline ( NMP) | Good or Bad

What is the National Monetization Pipeline! Monetization of operational public infrastructure assets



➤  Finance Minister Nirmala Sitharaman on Monday launched the National Monetisation Pipeline through which the government will be listing out its infrastructure assets worth Rs 6 lakh crore to be sold over the next four years.

The NMP comprises a four-year pipeline of the central government’s brownfield infrastructure assets. The NMP will give visibility to investors and also serve as a medium-term roadmap for the asset monetisation initiative of the government. 


➤Presenting the Union Budget 2021-22 in Parliament today, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman announced that the Government has proposed the following three steps to achieve the target of National Infrastructure Pipeline (NIP) in the coming years.


Main Focus

 Institutional structures to be created

There will be a special emphasis on monetization of assets

The share of capital expenditure in the central and state budgets to be increased.


➤ The Finance Minister informed that the NIP, which was launched in December 2019 with 6,835 projects, has been expanded to 7,400 projects. About 217 projects costing Rs 1.10 lakh crore have been completed under some important infrastructure ministries.



Infrastructure Financing - Development Finance Institute DFI

 The Union Finance Minister announced that a provision of Rs 20,000 crore has been made in the Union Budget to benefit from the Development Finance Institute (DFI). The Finance Minister informed that a bill will be introduced for setting up of DFI. 

              It will act as a provider, facilitator and catalyst for financing DFI infrastructure or infrastructure facilities. He said that the ambition for this DFI is to ensure a loan portfolio of at least Rs 5 lakh crore over 3 years.

            The Finance Minister also informed that suitable amendments will be made in the respective laws for debt financing of InvITs and REITs by Foreign Portfolio Investors. The move is expected to help raise funds for the infrastructure and real estate sectors.


 

Monetization of Assets

 The Union Finance Minister announced the launch of a National Monetization Pipeline of potential existing infrastructure assets. He said that monetization of public infrastructure assets already in operation is a very important financing option for creation of new infrastructure. The Finance Minister said that an Asset Monetization Dashboard would also be created to keep a close watch on the progress being made in this direction and to apprise the investors.


 Some important measures towards monetization are mentioned below -


 1. National Highways Authority of India and PGCIL have sponsored one-on-one InvITs, which will attract foreign and domestic institutional investors. 5 on-going roads with an estimated enterprise value of Rs.5000 crore are being transferred to NHAI-InvIT. Similarly transmission assets worth Rs 7000 crore will be transferred to PGCIL-InvIT.


 2. Railway will monetize its assets for operation and maintenance after commissioning of dedicated freight corridor.


 3. The next group of airports will be monetized for operational and management related concessions.


 The other major infrastructure assets to be implemented under the Asset Monetization Program are-


A. Toll road commissioned by NHAI

B. Transmission Assets of PGCIL

C. Oil & Gas Pipelines of GAIL, IOCL and HPCL

D. AAI airports located in Tier-2 and Tier-3 cities

E. Other infrastructure assets of the Railways

F. Storage assets of CPSEs like Central Warehousing Corporation, NAFED etc. and

G. Sports stadium.


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#NMP 

#NationalMonetisationPipeline 

#MonetisationForNation 

#NirmalaSitharaman 

#infrastructure



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