The government is planning to extend the scope of the National Monetisation Pipeline by launching a new initiative under which the state governments will also monetise their assorted assets and use the funds for capex and infrastructure investments.
After a good start to the NMP, through which the Centre seeks to catalyse flow of private capital of Rs 6 trillion in four years through FY25 to the infrastructure sector, the states will now be encouraged to leverage their brownfield assets to garner about Rs 3-4 trillion over three years, according to official sources.
These assets could include state highways, bus terminals and transmission lines, maritime tourist jetties, sports facilities and warehouses.
Niti Aayog and some central infrastructure ministries have already started deliberations with key states, including Maharashtra, Karnataka and Uttar Pradesh, on how they can assist the process by identifying the assets, suitable models for monetisation and by offering technical assistance.
“To sustain 10-11% annual economic growth, the states have to invest 9-10% of the GSDP in infrastructure. To generate resources, states have to leverage what they have,” an official said.
Maharashtra, the largest sub-national economy of India, would be a key player in the state-level asset recycling programme. A rough estimate showed that the state can easily generate Rs 50,000 crore via monetisation in 2-3 years. The state had monetised Mumbai-Pune expressway for about Rs 8,000 crore in 2020.
On September 18, a delegation led by chief minister Eknath Shinde that included deputy chief minister Devendra Fadnavis met Niti Aayog CEO Parameswaran Iyer and other officials on issues such as monetization. Maharashtra has decent assets base such as state highways, maritime jetties, bus terminals, state power transmission lines and sports stadias that could be monetized on public-private-partnership model. Besides upfront revenues and revenue sharing from operations, the transactions will lead to investment by private players in assets to give consumers a better experience in many of the assets such as jetties by redeveloping the existing infrastructure.
In asset monetisation both revenues to the asset owning agency and capex by private players are counted in arriving at asset monetization. Besides road assets, Uttar Pradesh may look at bus terminals such as the one in Ghaziabad, transmission lines, sports facilities among others for monetization.
Karnataka will also look at monetising similar assets. Odisha is currently identifying assets that can be monetised.
Of the total expected capital expenditure of Rs 111 trillion under the National Infrastructure Pipeline or NIP in five years through FY25, states are expected to contribute about Rs 44 trillion or 40%. The NMP-state component will give a fillip to states in this regard to mobilize resources. In FY22, the Centre managed to beat the monetisation target of Rs 88,222 crore by achieving Rs 97,000 crore largely from mines auctions, NHAI road assets and power sector assets.