National Monetization Pipeline

2021 AUG 24

Preliminary   > Industry and Infrastructure   >   Infrastructure & Investment models   >   infrastructure

Why in news?

  • Finance Minister Nirmala Sitharaman unveiled an ambitious four-year National Monetisation Pipeline (NMP) worth Rs 6 lakh crore to unlock value in brownfield projects, where investments have already been made, by engaging the private sector, transferring to them the rights but not the ownership in projects.

What is Asset Monetization?

  • Asset monetization is globally a widely used business practice.
  • This consists of limited period transfer of performing assets (or disposing of non-strategic / underperforming assets) to unlock “idle” capital and reinvesting it in other assets or projects that deliver improved or additional benefits.
  • Governments and public-sector organizations, which own and operate such assets and are primarily responsible for delivering infrastructure services, can adopt this concept to meet the ever-increasing needs of the population for improved quality of public assets and service

Objective of Asset Monetization Programme:

  • The strategic objective of Asset Monetization Programme is to unlock the value of investments in public sector assets by tapping private sector capital and efficiencies. Which can thereafter be leveraged for augmentation/ greenfield infrastructure creation
  • Asset Monetization needs to be viewed not just as a funding mechanism, but as an overall strategy for bringing about a paradigm shift in infrastructure operations, augmentation and maintenance.

About National Monetization Pipeline:

  • For Asset Monetisation initiative, to progress in the right direction, it is imperative that the Government makes available a strong pipeline of attractively structured, brownfield projects.
  • Further, sustained flow of transactions and visibility on same, across asset classes, is a key pre-requisite of long-term investors.
  • A robust asset pipeline, not only enables investors to plan their fund raisings and investment timelines, but also helps asset owners track and scan the performance of assets.
  • Within this context, National Monetisation Pipeline (NMP) was announced in the Union Budget 2021-22 and NITI Aayog has been entrusted with the mandate to develop National Monetisation Pipeline
  • Asset Monetisation being inextricably linked to new infrastructure creation, NMP has been planned to be co-terminus with the remaining four-year period of the National Infrastructure Pipeline (NIP).
  • NMP forms a baseline for the asset owning ministries for monitoring and tracking – investment, performance and data on potential assets, for the 4-year period from FY 22 to FY25.

  • Roads, railways and power sector assets will comprise over 66 per cent of the total estimated value of the assets to be monetised, with the remaining coming sectors including telecom, mining, aviation, ports, natural gas and petroleum product pipelines, warehouses and stadiums


Which of the following statements is/are correct regarding the implementation of ‘National Monetization Pipeline’?

1. It aims to unlock value in brownfield public projects by engaging the private sector

2.Assets monetized under this programme need to be handed back to government at the end of the transaction life

2. Government will retain the ownership of the asset monetized under this programme

Which of the statements given above is /are correct?

(a) 1 only

(b) 2 and 3 only

(c) 3 only

(d) 1,2 and 3