Prime Minister Narendra Modi today(Feb 24) said that the government will aim to monetise 100 public sector enterprises (PSEs) assets across sectors under the National Asset Monetisation Pipeline.
PM Modi was addressing a webinar on privatization and asset monetization organised by by the Department of Investment and Public Asset Management (DIPAM) and attended by officials from various ministries, investment bankers, sovereign and pension funds as well as domestic and international investors.
“Today, there are many underutilized and unutilized assets under the control of the government. We have set the target to monetize around 100 assets in oil, gas, port, airport and power sectors with chances for investment opportunities worth Rs 2.5 trillion (₹2.5 Lakh Crores). This process will continue in future also. The government is moving ahead with the mantra of ‘monetise and modernize’," PM Modi said.
PM Modi added that “When the government monetises, the private sector fills that gap and brings in investment, global best practices, top quality manpower, and changes in management with itself. This modernises things and brings new developments in sectors along with expansion and job opportunities.”
During the budget presented on February 1, Union Finance Minister Nirmala Sitharaman announced that setting up of national monetisation pipeline with a dashboard to track the progress and provide visibility to investors.
Asset monetisation is considered critical for investment infrastructure sectors, as the asset-owning ministries, CPSEs and local bodies can reduce their debt burden by monetising their asset portfolio for further investment in creation of assets. The direct benefit of asset monetisation is that it creates an enabling environment for participation of long-term institutional investors and introduce private sector efficiencies in the management of infrastructure assets.
FM Nirmala Sitharaman noted that monetising operating public infrastructure assets is a very important financing option for new infrastructure construction.
FM Sitharaman also had said that power transmission assets worth ₹7,000 crores will be monetised. Railways will monetise dedicated freight corridor assets, she said.
The Union government has set an disinvestment target of ₹1.75 lakh crores for FY22 . It has also unveiled a disinvestment policy framework under which it has identified four strategic sectors: atomic energy, space, and defence; transport and telecommunications; power, petroleum, coal, and other minerals; and banking, insurance, and financial services. The government will maintain a bare minimum presence in strategic sectors “Remaining are to be privatised or merged or subsidiarized with other CPSEs or closed,” the Finance Ministry announced in its policy.
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