Finance Minister Nirmala Sitharaman on Monday announced a Rs 1,75,000 disinvestment target in the upcoming year and asset monetisation of infrastructure projects, inviting "privatisation" criticism of opposition parties.
She proposed permitting asset monetisation through Infrastructure Investment Trusts (InvIT) to augment funds for the infrastructure and real estate sectors.
Let us take a look at her speech announcing asset monetisation of roads, airports, railway freight corridors and sports stadiums among others.
Asset Monetisation: Excerpts from Nirmala Sitharaman's Budget speech
Monetizing operating public infrastructure assets is a very important financing option for new infrastructure construction. A “National Monetization Pipeline” of potential brownfield infrastructure assets will be launched. An Asset Monetization dashboard will also be created for tracking the progress and to provide visibility to investors. Some important measures in the direction of monetisation are:
a. National Highways Authority of India and PGCIL each have sponsored one InvIT that will attract international and domestic institutional investors. Five operational roads with an estimated enterprise value of Rs 5,000 crore are being transferred to the NHAI InvIT. Similarily, transmission assets of a value of Rs 7,000 crore will be transferred to the PGCIL InvIT.
b. Railways will monetise Dedicated Freight Corridor assets for operations and maintenance, after commissioning.
c. The next lot of Airports will be monetised for operations and management concession.
d. Other core infrastructure assets that will be rolled out under the Asset Monetization Programme are: (i) NHAI Operational Toll Roads (ii) Transmission Assets of PGCIL (iii) Oil and Gas Pipelines of GAIL, IOCL and HPCL (iv) AAI Airports in Tier II and III cities, (v) Other Railway Infrastructure Assets (vi) Warehousing Assets of CPSEs such as Central Warehousing Corporation and NAFED among others and (vii) Sports Stadiums.
Sitharaman also announced disinvestment and strategic sale target of the year, proposing privatization of two Public Sector Banks and one General Insurance company in the year 2021-22.
Disinvestment and Strategic Sale: Excerpts from Nirmala Sitharaman's Budget speech
In spite of COVID-19, we have kept working towards strategic disinvestment. A number of transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22. Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22. This would require legislative amendments and I propose to introduce the amendments in this Session itself.
In 2021-22, we would also bring the IPO of LIC for which I am bringing the requisite amendments in this Session itself.
In the AtmaNirbhar Package, I had announced that we will come out with a policy of strategic disinvestment of public sector enterprises. I am happy to inform the House that the Government has approved the said policy. The policy provides a clear roadmap for disinvestment in all nonstrategic and strategic sectors. We have kept four areas that are strategic where bare minimum CPSEs will be maintained and rest privatized. In the remaining sectors all CPSEs will be privatized. The main highlights of the policy are mentioned at Annexure-III.
To fast forward the disinvestment policy, I am asking NITI to work out on the next list of Central Public Sector companies that would be taken up for strategic disinvestment.
To similarly incentivise States to take to disinvestment of their Public Sector Companies, we will work out an incentive package of Central Funds
for States.
Idle assets will not contribute to AtmaNirbhar Bharat. The non-core assets largely consist of surplus land with government Ministries/Departments and Public Sector Enterprises. Monetizing of land can either be by way of direct sale or concession or by similar means. This requires special abilities and for this purpose, I propose to use a Special Purpose Vehicle in the form of a company that would carry out this activity.
In order to ensure timely completion of closure of sick or loss making CPSEs, we will introduce a revised mechanism that will ensure timely closure of such units.
I have estimated Rs 1,75,000 crore as receipts from disinvestment in BE 2021-22.
Opposition reacts: 'India on Sale'
The proposition invited criticism from the opposition who alleged that the entire Budget looked like "India on sale" scheme.
