NEW DELHI :
Central government has exceeded its asset monetization target of ₹88,000 crore for FY22 and has completed deals worth ₹96,000 crore as per the assessment made at a high-level review meeting on Tuesday, said a person familiar with the development.
The sectors which contributed in a big way to the asset monetisation include roads, power and mining of coal and minerals. For FY23, the Centre has firmed up asset monetisation target of over ₹1.6 trillion for which proposals from various ministries are at different stages of processing, said the person who spoke on condition of anonymity.
The key investors who acquired assets in FY22 include CPP Investments, Ontario Teachers Pension Plan and Utilico Emerging Markets Trust Plc, said a second person, who also spoke on condition of anonymity. Emails sent to these investors on Tuesday evening remained unanswered at the time of publishing.
The total asset sale in FY22 could actually go upto ₹1 trillion when the final figures come, said the first person quoted above. Finance minister Nirmala Sitharaman chaired the meeting in which senior officials from finance and infrastructure ministries and NITI Aayog participated. There was no formal response to emails sent to the finance ministry and NITI Aayog on Tuesday evening seeking comments for the story.
The asset monetisation plan was announced by finance minister Nirmala Sitharaman in her union budget for FY22 as an important financing option for creating new infrastructure assets. The plan entailed a pipeline of ₹6 trillion worth of assets to be monetised in a four year period till FY25. The government expects the asset sale achieved in FY22 to trigger another ₹9 trillion of cumulative investments as the asset acquirers raise debt and expand their operations. The idea is to crowd in private investments in infrastructure, a key element of the government’s economic recovery strategy.
In FY22, 390 kilometers of road projects were monetised under the infrastructure investment trust mode and three ‘toll-operate-transfer’ bundles were bid out, the person said. This has fetched ₹23,000 crores, the person said. In the power sector, transmission and hydel power assets worth ₹9,500 crore have been monetised. In the mining sector, 31 mineral blocks have been auctioned with estimated annual monetisation value of about ₹18,700 crores in FY22. These have helped states to raise resources for capital funding requirement.
“There will be rigorous monitoring of the asset monetisation programme in FY23. Private debt to GDP ratio in India is at around 56%, which is lower than in many other countries. Asset sale programme will facilitate more debt and equity investments into the infrastructure sector. It will be done in active partnership with states,” said the first official quoted above. States and union territories have significant infrastructure asset base that can be leveraged to enhance their investment in the sector, said the official.
The Centre is pursuing creation of ₹111 trillion worth of greenfield infrastructure projects for which it needs to generate resources. It is also financing projects initiated by states by way of long term loans with the idea of creating assets that suit local needs. Centre has also created a development financial institution–National Bank for Financing Infrastructure and Development–to make long term finance available to projects.