Govt finalising plan to monetise Rs 6 lakh crore infra assets: | ECONOMY by VIVEK SINGH

Govt finalising plan to monetise Rs 6 lakh crore infra assets: DIPAM secretary [12th Aug 2021]

Asset Monetization:
Asset Monetization involves creation of new sources of revenue by unlocking of value of hitherto unutilized or underutilized public assets. Many public sector assets are sub-optimally utilised and could be appropriately monetized to create greater financial leverage and value for the companies and of the equity that the government has invested in them. The objective of the asset monetization programme of the Government of India (GOI), is to unlock the value of investment made in public assets which have not yielded appropriate or potential returns so far, create hitherto unexplored sources of income for the company and its shareholders, and contribute to a more accurate estimation of public assets which would help in better financial management of government/public resources over time.

Asset Monetization can include:
* Selling of unutilized land of GoI/PSU
* Giving an asset (let us say Dedicated Freight Corridor) of a PSU/GoI to a Private Operator for Operation and Maintenance for a contract period (say 30 years) in return of one time money or annual payments
* Giving the already constructed NHAI roads to Private Parties on TOT (Toll Operate Transfer) model for a certain period in return for one time money [For details refer the book]
* Giving the Airports to Private Operators for a certain period on PPP model in return of annual payments (example.. Lucknow, Ahmedabad etc. given to Adani group)
* Giving the Transmission Assets of PGCIL, Oil & Gas pipelines of GAIL, IOCL, HPCL to private operators in return for annual payments for certain contract period.

"Disinvestment/divestment" generally means reducing the stake/ownership in a company/entity (where a company/entity can have several assets). But "Asset Monetization" basically means giving a particular (brownfield) asset of GoI/PSU to Private Parties in return of one time or annual payments.