Finance Minister launched

''National Monetization
Pipeline'' scheme

A Presentation by:- Shivang Bhatia

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 23rd
August 2021.
 About NMP scheme

• Union finance minister Nirmala Sitharaman on 23rd

August launched the National Monetisation Pipeline
(NMP), through which the government aims to raise
$81billion by leasing out state-owned infrastructure
assets over the next four years.

• Significance of monetization as per the FM is that it will

help in creating further value for infrastructure creation in
India and exploring innovative ways of private
participation without transferring the government
ownership.
• 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.

• 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(underutilized assets) and stable
revenue streams, and structured partnerships under
defined contractual frameworks with strike KPIs and
performance standards.
• Under the scheme, roads, railways and power sector
assets would be comprising of more than 66 per cent of
the total estimated value of the assets to be monetised.

• FM 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 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 to reduce the burden on it.
 Criticism on NMP

• There is no guarantee that private players will make the

assets profitable. This can be evident in the bankrupt
cases of many private companies.
• Several job losses may happen because private
companies believe in more efficiency and less human
resources.
• There is a criticism from the opposition that the money
raised may be used to fill the fiscal deficit, instead of
using them on infrastructure projects as mentioned.
• As the government took this decision unilaterally if the
future government cancels the leases, the entire process
will become a waste of money.
• This may become a monopoly of a few corporate
companies. Moreover, this is vulnerable to political
influence. Companies that are close to the political
leaders in power may get these projects if the auction
process is not transparent.
• The government’s core infrastructure assets are also
taking care of public welfare. If private players raise the
prices, the public has to pay more. Unless there is a
price regulation from the government, this will become a
burden on the public.
THANK YOU