NATIONAL MONETISATION PIPELINE (Syllabus: GS Paper 3 – Economy)

Context: The National Monetisation Pipeline successfully monetised assets worth Rs 3.85 lakh crore over a span of three years, contributing significantly to India's infrastructure funding goals.

National Monetisation Pipeline (NMP)

• About: It has been formulated by NITI Aayog, in collaboration with infrastructure ministries, as mandated by the Union Budget 2021-22.
• Monetisation Potential: NMP aims to unlock Rs 6.0 lakh crores from the central government's core assets over FY 2022-2025, enhancing infrastructure development nationwide.
• Implementation: It focuses on leveraging private sector participation in brownfield projects, wherein revenue rights (not ownership) are transferred to private entities, ensuring continued public sector involvement.
• Framework of the Pipeline:

oThe pipeline's development involved extensive consultations with line ministries and departments, ensuring comprehensive coverage of available assets and infrastructure needs.

oNMP excludes monetisation through disinvestment and non-core asset sales, focusing solely on unlocking value from core infrastructure assets.

• Alignment with National Goals: It complements the National Infrastructure Pipeline (NIP), aligning its timeline with NIP's objectives to support Rs 111 trillion in infrastructure investments by FY25.

Monetisation

• About: It refers to a government transferring its revenue rights to private parties in exchange for upfront money, a revenue share, and commitments to invest in assets.
• Purpose: The primary objective of monetisation transactions is to raise funds within a specified period.
• Calculation of Revenue Potential: Private players involved in monetisation projects undertake detailed calculations to estimate potential earnings over the project's duration.