National Monetisation Pipeline: What is it and how will it benefit the country?

Published on Aug 23, 2021 08:01 PM IST
Union finance minister Nirmala Sitharaman, while launching the National Monetisation Pipeline, said, "It talks about brownfield assets where investment is already being made, where there are assets either languishing or not fully monetised or under-utilised."
Union finance minister Nirmala Sitharaman launches the National Monetisation Pipeline in the presence of Niti Aayog VC Dr Rajiv Kumar (right), CEO Amitabh Kant (left), and secretaries of infrastructure line ministries, in New Delhi on Monday.(Sanjeev Verma/HT Photo)
Union finance minister Nirmala Sitharaman launches the National Monetisation Pipeline in the presence of Niti Aayog VC Dr Rajiv Kumar (right), CEO Amitabh Kant (left), and secretaries of infrastructure line ministries, in New Delhi on Monday.(Sanjeev Verma/HT Photo)
By | Edited by Amit Chaturvedi, Hindustan Times, New Delhi

Union finance minister Nirmala Sitharaman on Monday launched the National Monetisation Pipeline (NMP), through which the government aims to raise $81 billion by leasing out state-owned infrastructure assets over the next four years.

This will help fund new capital expenditure without pressuring government finances.

The proposal involves handing assets including roads, railways, airports, sports stadiums, power transmission lines and gas pipelines to private operators, Sitharaman said.

Here is everything you need to know about the NMP scheme:

  • According to the government vision, NMP is envisaged to serve as a medium-term roadmap for identifying potential monetisation-ready projects, across various infrastructure sectors.
  • The NMP has been prepared after insights, feedback and experiences consolidated through multi-stakeholder consultations undertaken by Niti Aayog, the finance ministry and infrastructure line ministries.
  • For now, the government has only included the assets of infrastructure line ministries and CPSEs working in the infrastructure sectors. Monetisation through disinvestment and monetisation of non-core assets have not been included in the NMP.
  • The framework for monetisation of core asset monetisation has three key imperatives: Monetisation of rights not ownership (this means the assets will have to be handed back at the end of transaction life, brownfield de-risked assets and stable revenue streams, and structured partnerships under defined contractual frameworks with strike KPIs and performance standards.
  • Considering that infrastructure creation is inextricably linked to monetisation, the period for NMP has been decided so as to be co-terminus with balance period under National Infrastructure Pipeline (NIP).
  • Sitharaman said that NMP will create employment opportunities, thereby enabling high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare.
  • The NMP report has been organised in two volumes which were released today in the presence of Vice Chairman (Niti Aayog), CEO (Niti Aayog), and secretaries of infrastructure line ministries. While the first volume is structured as a guidance book, Volume 2 is the actual roadmap for monetisation.
  • The plan is in line with Prime Minister Narendra Modi's strategic divestment policy, under which the government will retain presence in only a few identified areas with the rest tapping the private sector.
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