What is National Monetization Pipeline 2021? - All You Need to Know

Union Finance Minister Nirmala Sitharaman launched National Monetisation Pipeline in Delhi on August 23, 2021. 

While speaking on the occasion, Finance Minister Nirmala Sitharaman said that National Monetization Pipeline talks about brownfield assets where investment is already being made, where there are assets either languishing or not fully monetized or under-utilized.

She said that "by bringing in private participation, we are going to monetize it (assets) better and with whatever resource that you obtained by monetization, you are able to put in for further investment into infrastructure building."

By bringing in private participation, we are going to monetize it (assets) better and with whatever resource that you obtained by monetization, you are able to put in for further investment into infrastructure building: Finance Minister Nirmala Sitaraman pic.twitter.com/bkdLBxJxu8

— ANI (@ANI) August 23, 2021

Significance

The Finance Minister stated that it is important that India recognizes that the time has come for making the most out of our assets.

It is important that India recognizes that the time has come for making the most out of our assets: Finance Minister Nirmala Sitharaman after launching National Monetisation Pipeline in Delhi pic.twitter.com/JHlnEB2pFj

— ANI (@ANI) August 23, 2021

She further said that asset monetisation, based on the philosophy of creation through monetisation, is aimed at tapping private sector investment for new infrastructure creation.

She continued by saying that this is necessary for creating employment opportunities, thereby enabling high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare.

This is necessary for creating employment opportunities, thereby enabling high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare: Finance Minister Nirmala Sitharaman (2/2) pic.twitter.com/Bxz5AAvIJQ

— ANI (@ANI) August 23, 2021

The Minister said that at this point, the list of assets that are coming, are all the Central government's assets. We're not talking about states.

What is National Monetization Pipeline?

The National Monetisation Pipeline comprises a four-year pipeline of the Central Government's brownfield infrastructure assets. It will serve as a medium-term roadmap for the Asset Monetisation initiative of Centre, besides providing visibility to the investors.

The Finance Ministry stated, "The National Monetisation Pipeline (NMP) estimates aggregate monetization potential of Rs 6 lakh crores through core assets of the Central Govt, over a 4-year period, from FY 2022 to FY 2025."

The Ministry added,"Ministries of Roads, Transport & Highways, Railways, Power, Pipeline & Natural Gas, Civil Aviation, Shipping Ports & Waterways, Telecommunications, Food & Public Distribution, Mining, Coal & Housing & Urban Affairs are included in National Monetisation Pipeline."

Ministries of Roads, Transport & Highways, Railways, Power, Pipeline & Natural Gas, Civil Aviation, Shipping Ports & Waterways, Telecommunications, Food & Public Distribution, Mining, Coal & Housing & Urban Affairs are included in National Monetisation Pipeline: Finance Ministry

— ANI (@ANI) August 23, 2021

NITI Aayog CEO Amitabh Kant stated, "We are fully committed to delivering success to the National Motenisation Pipeline. We feel that it is very important to bring in the private sector for better operation & maintenance, therefore we are committed to very strong delivery on the ground."

We are fully committed to delivering success to the National Motenisation Pipeline. We feel that it is very important to bring in the private sector for better operation & maintenance, therefore we are committed to very strong delivery on the ground: NITI Aayog CEO Amitabh Kant pic.twitter.com/4bCR95jaC7

— ANI (@ANI) August 23, 2021

Niti Aayog Vice-Chairman Rajiv Kumar said, "It's a remarkable step forward & it is all been assured by the Finance Minister's budget of 2021-22, and also denotes the PM's unambiguous commitment that infrastructure growth & economic growth in India will be private sector-led."

He further added saying that the government is committed to making greater opportunities available for the private sector participation including in infrastructure. Infrastructure has huge multiplier effects. This is the next step in mobilising private capital for the development of infrastructure."

This govt is committed to making greater opportunities available for the private sector participation including in infrastructure. Infrastructure has huge multiplier effects. This is the next step in mobilising private capital for the development of infrastructure: Rajiv Kumar

— ANI (@ANI) August 23, 2021

What does this mean?

FM Nirmala Sitharaman explained that National Monetization Pipeline does not mean that the government will be selling away the lands. It talks about brownfield assets that need to be better monetized.

For those who have this question in mind -- are we selling away the lands? No. National Monetization Pipeline is talking about brownfield assets that need to be better monetized: Finance Minister Nirmala Sitharaman pic.twitter.com/Mi9IoUABHR

— ANI (@ANI) August 23, 2021

However, the Minister clarified by saying that the ownership of assets will remain with the government and there will be a mandatory hand back. She added that the private sector partners will have to give it back after a certain time.

Ownership of assets remains with the government. There will be a mandatory hand back. They (private sector partners) will have to give it back after a certain time: Finance Minister Nirmala Sitharaman after launching National Monetisation Pipeline pic.twitter.com/ZirlPHrL7n

— ANI (@ANI) August 23, 2021

Only under-used assets will be monetised. The Minister said that by bringing in private participation, the government would be able to monetise assets better and with the resources thus obtained, it would be able to pump more funds into infrastructure building.

Background

The central government had paid a lot of emphasis on Asset Monetisation in the Union Budget 2021-22 to raise innovative and alternative financing for infrastructure and included a number of key announcements.