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Economy

National Monetisation Pipeline (NMP)

The National Monetisation Pipeline (NMP) or asset monetisation pipeline of central ministries and public sector enterprises is an important plan for resource mobilization and employment generation.

Nov 23, 2022

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List of contents in this explainer about the National Monetisation Pipeline (NMP)
 
S.NoContents
1.
News : The Coal Ministry leads the National Monetisation Pipeline
2.NMP was launched in
3.NMP was launched by
4.National Monetisation Period
5.Pipeline developed by
6.Aggregate monetisation potential
7.What is asset monetization?
8.Infrastructure Line Ministries
9.Sector-wise Monetisation Pipeline over FY 2022-2025
10.Indicative Value of Monetisation Pipeline Year-wise FY 2022-25 (INR Crores)
11.How to monetise core assets?
12.Prelims questions
13.Mains question
 

News : The Coal Ministry leads the National Monetisation Pipeline

 
Details in the news
Assets monetised as of now Nov 2022 - Rs. 33,422 crore (FY 2022-23)
Leading line ministry - Coal Ministry - Rs. 17,000 crore
Overall target - Rs. 1,62,422 crore (2022-23)
Expected Shortfall - Rs. 38,243 crore
Final target - Rs. 1,24,179 crore (FY 2022-23)
 

NMP was launched in

August 2021
 

NMP was launched by

Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman
 

National Monetisation period

2022-25 (4 years)
 

Pipeline developed by

The asset monetisation pipeline was developed by the NITI Aayog in consultation with infrastructure line ministries. The mandate for asset monetisation was given to NITI Aayog through the Union Budget 2021-22
 

Aggregate monetisation potential

The aggregate monetisation potential of core assets of central government under the National Monetisation Pipeline is Rs. 6 lakh crores. This corresponds to approx. 14% of the proposed outlay for Centre under National Infrastructure Pipeline i.e Rs 43 lakh crore.
 

What is asset monetization?

1.Asset monetization is aimed at tapping private sector investment for new infrastructure creation and monetising core assets of central government.

2.It is important for employment generation, to enable high economic growth, and to integrate rural and semi-urban areas for overall public welfare.

 

Infrastructure Line Ministries

 

S.NoInfrastructure line ministries
1.Roads, Transport and Highways
2.Railways
3.Power
4.Pipeline and Natural Gas
5.Civil Aviation
6.Shipping Ports and Waterways
7.Telecommunications
8.Food and Public Distribution
9.Mining
10.Coal
11.Housing and Urban Affairs
 
 

Sector-wise Monetisation Pipeline over FY 2022-2025

 

S.NoSectorsTo monetise
1.Roads1,60,200 crore
2.Railways1,52,496 crore
3.Power Transmission45,200 crore
4.Power Generation39,832 crore
5.Natural Gas Pipeline24,462 crore
6.Product Pipeline/Others22,504 crore
7.Telecom35,100 crore
8.Warehousing28,900 crore
9.Mining28,747 crore
10.Aviation20,782 crore
11.Ports12,828 crore
12.Stadiums11,450 crore
13.Urban Real estate15,000 crore
 
 
The top 5 sectors (by estimated value) capture ~83% of the aggregate pipeline value. These top 5 sectors include: Roads (27%), Railways (25%), Power (15%), oil & gas pipelines (8%) and Telecom (6%).
 

Indicative Value of Monetisation Pipeline Year-wise FY 2022-25 (INR Crores)

 

S.NoFinancial YearTo monetise
1.FY 2021-202288,190 crore (15% of assets)
2.FY 2022-20231,62,422 crore
3.FY 2023-20241,79,544 crore
4.FY 2024-20251,67,345 crore
 
 
The aggregate as well as year on year value under National Monetisation Pipeline (NMP) is only an indicative value. The actual realization for public assets depend on the timing, transaction structuring, investor interest etc.
 

How to monetise core assets?

1.Identify de-risked and brownfield assets of the govt.
2.Select assets with stable revenue generation profile.
3.Contractual transaction of the asset based on rights and not ownership.
4.Primary ownership of the assets under the govt.
5.Hand back the assets to the govt at the end of contract.
 
 
 
Prelims questions

1.The aggregate monetisation potential of core assets of central government under the National Monetisation Pipeline is

 
A. Rs. 7 lakh crore
B. Rs. 5 lakh crore
C. Rs. 3 lakh crore
D. Rs. 6 lakh crore
 

2.Which sector has the highest potential in the sector-wise monetisation pipeline under the NMP

 
A.Railways
B. Telecom
C. Roads
D. Aviation
 

3.The asset monetisation pipeline was developed by

 
A. NITI Aayog
B. Finance Commission
C. Ministry of Finance
D. Ministry of Coal
 

4.Consider the following statements

 

1.Asset monetisation pipeline is aimed at tapping private sector investment for new infrastructure creation.

2.It is important for employment generation, and to enable high economic growth.

 
Select the correct statements
 
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
 

5.As on Nov 2022, which of the following infrastructure line ministry leads the core asset monetisation targets under the National Monetisation Pipeline

 
A. Ministry of Coal 
B. Ministry of Roads
C. Ministry of Power
D. Ministry of Telecom
 
Mains question
 
1.Asset monetisation pipeline of central ministries and public sector enterprises is an important plan for resource mobilization and employment generation. Discuss.
 
 
 
Source: Press Trust of India, National Monetisation Plan/National Portal of India
Image : Darkmoon_Art/Pixabay
 
The above work is for the purpose of legitimate use of the copyrighted work for educational advancement of the society. If any complaints, please contact us at support@iasindepth.com.

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