FM Sitharaman unveils Rs.6 lakh crore NMP scheme
With the country’s economy facing gloomy days, Finance Minister Nirmala Sitharaman on Monday unveiled an Rs.6 lakh crore National Monetisation Pipeline (NMP) that included unlocking value by involving private companies across infrastructure sectors — from passenger trains and railway stations to airports, roads, and stadiums. Around 25 Airports Authority of India (AAI) airports, including the ones at Chennai, Bhopal, Varanasi, and Vadodara, as well as 40 railway stations, 15 railway stadiums and an unidentified number of railway colonies have been identified for getting private investments. Addressing a volley of questions about leasing out so much public property, the finance minister claimed that there will be safety clauses of taking back these assets after some time. But many economists feel this project is rather well-conceived, raising several objections from various quarters.
Under the plan, private companies can invest in projects for a fixed return using the InvIT route as well as operate and develop the assets for a certain period before transferring them back to the government agency. Some assets such as warehouses and stadiums can also be given on a long-term lease for operations. “The asset monetization pipeline takes the NIP (National Infrastructure Pipeline) to the next phase where you are looking at public-private partnership,” Sitharaman told media.
“So let there not be any confusion, ‘oh this government is selling away’. No. These are brownfield assets which will still be under government ownership,” the FM Sitharaman added.
Stating that there is no transfer of ownership of land, she said “the NMP talks about brownfield infra assets where investments have already been made, where there is a completed asset which is either languishing or which is remaining not fully monetized or which is remaining underutilized… So by bringing in private participation into this, you are going to be able to monetize it better, and with whatever resources you obtain through the monetization, you will be able to put in further investment into infrastructure,” she said.
The total indicative value of NMP for core assets of the Central government has been estimated at Rs.6 lakh crore over the four-year period FY22 to FY25. The estimated value corresponds to about 5.4 percent of the total infrastructure investment envisaged under the NIP which is Rs.111 lakh crore and 14 percent of the proposed outlay for the Centre (Rs.43 lakh crore). This pipeline of assets has been phased out over a four-year period starting FY 2022 up till FY 2025, she said.
“The infrastructure NMP is talking about brownfield assets which need to be better monetized. The ownership of those assets remains with the government and there will be a mandatory hand-back after a certain time,” she said. “So let there not be any confusion, ‘oh this government is selling away’. No. These are brownfield assets which will still be under government ownership,” the Minister added.
What is this NMP plan?
More than half of the monetization plan is from the roads and railways sector. The biggest chunk of Rs.1.6 lakh crore will come from monetizing 26,700-km of existing operation national highways and new roads. NHAI will take the InvIT (Infrastructure Investment Trust) route for monetizing some of these assets. As many as 400 railway stations, 90 passenger trains, 741-km Konkan Railways, and 15 railway stadiums and colonies are planned to be monetized for an estimated Rs.1.2 lakh crore.
Monetising 28,608 circuit kilometers of power transmission lines is estimated to generate Rs.45,200 crore and another Rs.39,832 crore will come from 6 GW of power generation assets. The telecom sector will give Rs.35,100 crore from monetizing 2.86 lakh km of BharatNet fiber and 14,917 signal towers of BSNL and MTNL. Close to Rs.29,000 crore, each is estimated from monetizing warehouses and coal mines.
Monetising 8,154 km of natural gas pipelines is estimated to give Rs.24,462 crore and 3,930-km product pipelines another Rs.22,504 crore. Airport monetization will fetch Rs.20,782 crore and ports another Rs.12,828 crore. Monetizing two national stadiums, including the Jawaharlal Nehru Stadium in New Delhi, and an equal number of regional centers (at Bengaluru and Zirakpur) is estimated to yield Rs.11,450 crore.
Redevelopment of seven residential colonies in Delhi, including ones at Sarojini Nagar and Nauroji Nagaras well as the development of residential/ commercial units on 240 acres of land in Ghitorni in Delhi has also been identified to garner Rs.15,000 crore.
Is this workable?
Many economists say that these so-called figures are created by the Babudom, and Finance Minister Nirmala Sitharaman (Read Political Leadership) was just reading out from the handouts prepared by the Civil Servants without application of mind. Some of these projects may lead to helping some friendly Corporates (like Adani was allowed to tender all the six airports and later acquire Mumbai Airport too by not fixing a ceiling) and ultimately to Crony Capitalism, they say, accusing Modi Government of bad optics in the country with an ailing economy.
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