New Delhi: The Union government’s ambitious asset monetisation plan under the National Monetisation Pipeline (NMP) may miss the goal in the fiscal year 2022-23 by a wide margin as the railways, telecom and petroleum sectors are unlikely to meet their targets, the Financial Express reported.
There could a shortfall of about Rs 50,000 crore as against the FY23 NMP target to generate Rs 1.62 trillion in revenues and investments, officials told the newspaper.
Finance minister Nirmala Sitharaman, in her Union Budget for FY22, had unveiled the Rs 6 trillion NMP with a four-year roadmap [from FY22 to FY25] to monetise existing infrastructure assets by leasing them out to private firms for a fixed tenure under a revenue-sharing model. It’s aimed at generating funds for infrastructure spending.
According to the newspaper, the railways and telecom sectors – which accounted for half of the asset monetisation target for the current fiscal – were the worst performers. The petroleum sector was also seen as the worst performer in achieving its asset monetisation target for FY23.
For the entire period till FY25, Railways has a monetisation target of Rs 1.52 lakh crore, which includes the monetisation of 400 stations and privatisation of 90 trains and 15 railway stadiums.
It’s the biggest component of the Rs 6 trillion NMP, which is why the government in May last year took serious note of the railway ministry’s failure to achieve the asset monetisation target in FY22, the Economic Times reported.
On the other hand, the mining industry – which is one of the core industries of the economy – has been making up for the poor show of the railways for the second consecutive year.
“With the end-of-the-year position not looking good, the railways’ target has been reduced to about Rs 30,000 crore for FY23 from Rs 57,222 crore while the target for ‘coal and other mining’ have been increased to about Rs 37,500 crore from Rs 6,060 crore,” an official told the Financial Express.
‘Coal and other mining’ had yielded upfront revenues and capex to the tune of Rs 58,000 crore in FY22 against the target of Rs 3,394 crore, the report said.
In FY23 also, the actual achievement of the coal and other mines monetisation by way of revenues in upfront premium, annual royalties and investment by private players are expected to be higher than the revised target, it said.
in FY22, the Union government completed deals worth Rs 96,000 crore through the monetisation route, 12% more than the target. Roads, power and the mining of coal and minerals contributed the most to surpassing the asset monetisation goal, Mint reported.
However, railways collected just Rs 800 crore via monetisation through the redevelopment of one railway station and some railway colonies in the last fiscal year as against the target of Rs 17,810 crore.
Even this fiscal year, according to the NMP, the railways needs to monetise 120 stations, 30 trains and a 1,400-kilometre track, among others. But, as per the report, it has achieved little so far.
The Department of Telecommunications (DoT) has so far not raised any money through the asset monetisation route. It was expected to raise Rs 20,180 crore in FY23, including Rs 15,780 crore from BharatNet fibre and Rs 4,400 crore from mobile tower sales.
However, the DoT decided to drop BharatNet Infra from its asset monetisation plan, news agency PTI reported in December 2022, as it failed to get a satisfactory response from private players. And, bids are yet to be called for the Rs 4,400 crore BSNL/MTNL tower monetisation plan.
According to another FE report, the railways and telecom sectors have decided to rely more on self-funding, budget support, and debt for their capital expenditure, instead of the asset recycling mode.
The monetisation of natural gas and petroleum product pipelines was projected to fetch Rs 9,176 crore in FY23. However, oil and gas companies have proposed alternate assets such as monetisation of oil fields (on the lines of mines monetisation) through private participation in exploration, the Financial Express reported.
“We are trying to see if those can qualify as asset monetisation. These firms have proposed increasing production with private sector participation and technology,” another official told the business daily.