Current Affairs 2021: Salient Features of National Monetisation Plan

By Yash Singhal

National Monetisation Plan was recently launched by the Government of India. Read here in detail about the salient features of the National Monetisation Pipeline(NMP).

National Monetisation pipeline (NMP) was launched by Finance Minister Smt. Nirmala Sitharaman on August 23, 2021, to monetize brownfield projects that are under the control of the Government of India. Through NMP, the government targets to earn 6 lakh crore rupees in the next 4 financial years ending in 2025. The brownfield units lying under-utilized or which are not fully monetized and are under the control of the government across various different sectors like roads, railways, telecom and others will be monetized in a phased manner in the next 4 financial years. Through this pipeline or project, the government is targeting to engage the private sector in these strategic sectors and also to generate revenue from the un-utilized assets. The most interesting and innovative idea that was implemented over here is that no land is included in this pipeline along with that no transfer of ownership of assets would take place. The government has also planned to take ownership of assets that has to be monetized after a stipulated time of say 25-30 years. 

This strategic project is also designed in alignment with the interests of private and global investors who are interested to build up assets and taking direct control of those assets. Initially, the assets which are in direct control of the government of India are included in this project but now states are also encouraged to monetize their assets by receiving dedicated incentives from the central government. Incentives given in terms of funds have restrictions on using them in developing long term assets. Units that are monetized under this pipeline have to hand back to the government, whether state or central, after 25-30 years as according to the contract deadline.

Through NMP, the government is also trying to address a whole new and different approach of creating financing new infrastructure projects across various sectors. Initially, the Government of India (GoI) has opted for monetising the brownfield assets under the roads sector. After the initial success of the project, NITI Aayog has also identified other 12 strategic sectors for monetisation. Adding up all the funds, GoI has targeted for 6 lakh crore fund to speed up future developments by creating up new assets.

Implementation of National Monetisation Plan

GoI has created different models for the implementation of their visionary project NMP, some of these are as follows:

• Operate MaintainTransfer (OMT)
• Toll Operate Transfer (TOT) & variants
• Operations, Maintenance & Development (OMD)
• Rehabilitate Operate Maintain Transfer (ROMT)

GoI has already implemented NMP in the roads sector and on the National Highways Authority of India (NHAI). It has already raised 17,000 crores through the OMT model. 
GoI has also formed the framework for the timely implementation of the project. Under this framework, different ministries have been assigned a yearly deadline to monetize the brownfield projects. In the meantime, ministries have been also given handholding support for transactions. A dedicated committee has been formed to review the monthly work completed by different departments or ministries. A real-time dashboard has also been created to record the transactions done by different departments.