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National Monetisation Pipeline (NMP)
Context:
The National Monetisation Pipeline successfully monetised assets worth Rs 3.85 lakh crore over a span of three years.
National Monetisation Pipeline (NMP)
- Following the Union Budget 2021-22 announcement, NMP was prepared by NITI Aayog in partnership with relevant Infrastructure Ministries.
- Under it, the government identified 13 sectors including:
- Airports, railways, roads, shipping, gas pipelines among others.
- These will be privatised as the government aims to monetise its brownfield infrastructure assets.
- The funds generated from this process will be used to develop infrastructure nationwide.
- Monetization through disinvestment and monetization of non-core assets have not been included in the same.
- The framework for monetisation of core asset has three key imperatives as under:
- Major Accomplishments
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- Over the span of three years, a total of Rs. 3.85 lakh crore worth of assets were monetised through the NMP.
- Ministry of Coal emerged as the top performer followed by Ministry of Road Transport and Highways.
- Other notable achievers included the Ministries of Power, Mines, Petroleum and Natural Gas, Urban Development, and Shipping.
- Future Outlook
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- National Highway Authority of India (NHAI) has identified and published an indicative list of 33 assets for monetisation in 2024-25.
- Focus on achieving remaining targets and optimising asset monetisation processes.
What is Asset Monetisation?
- Process of generating revenue from public assets by unlocking their economic value.
- It was first proposed by Vijay Kelkar’s committee in 2012 for fiscal consolidation, aimed at raising resources for infrastructure development and financing needs.
Disinvestment, Strategic Investment and Privatisation
- Disinvestment: Selling minority shares of Public Enterprises, to another entity be it public or private is disinvestment.
- In this the government retains ownership of the enterprise.
- Strategic Disinvestment: When the government sells majority shares (up to 50% or a higher percentage) in an enterprise coupled with transfer of management control, that is strategic disinvestment/sale.
- Here, the government gives up the ownership of the entity as well.
- Privatisation: Here, a business, operation, or property owned by the government is transferred to ownership by a private entity.
- It helps governments cut costs and boost efficiency, as private companies can often transport goods more quickly and effectively.
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Department of Investment and Public Asset Management (DIPAM)
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