CPSE assets sale to bring about paradigm shift in infrastructure: FM

Finance Minister Nirmala Sitharaman on Tuesday said monetisation of Central Public Sector Enterprises (CPSE) assets is based on the principle of value creation for the government and investors and would bring about a paradigm shift in infrastructure augmentation and maintenance.

Chairing the National Workshop with the states/UTs on Asset Monetisation organised by Niti Aayog, the minister sought the collaboration of states for the holistic development of infrastructure.

She said India can become a $5 trillion economy, while striking the right balance between fiscal imperatives and socio-economic welfare, through active collaboration between the public and private sector.

"Asset monetisation needs to be viewed not just as a funding mechanism, but as an overall strategy for bringing about a paradigm shift in infrastructure augmentation and maintenance," she added.

Sitharaman also underlined the government's resolve for value creation and improvement in the productivity of brownfield infrastructure assets via innovative instruments.

Observing that asset monetisation is based on the principle of value creation for government and investors, she said, "Our vision for Infrastructure is ultimately of, for and by our states., without whose collaboration, holistic development of infrastructure is neither feasible nor impactful."

Sitharaman further said the various initiatives announced in the Budget  2021-22 will facilitate funding for infrastructure creation under NIP.

"The finance minister stressed on the need for monetisation as an alternative funding mechanism and the potential therein for improved operational value.

"She also called for a proactive and collaborative approach by the central and state agencies for achieving the objectives of the National Monetization Pipeline," Niti Aayog said in a statement.

Sitharaman also highlighted the firm support provided by the government by way of steady economic reforms, including the clear directional change provided under Budget 2021–22, it added.

"She mentioned that investment planned under the National Infrastructure Pipeline (NIP) is critical for boosting growth in States and the various initiatives in this year's Budget will facilitate funding for infrastructure creation under NIP," the statement said.

Prime Minister Narendra Modi had last month said that 100 under-utilised or unutilised assets with public sector units (PSUs), such as those in the oil and gas and power sectors, will be monetised, creating Rs 2.5 lakh crore of investment opportunities.

Sitharaman in her 2021-22 Budget speech had said monetising operating public infrastructure assets is a very important financing option for new infrastructure construction.

Also speaking at the event, Niti Aayog CEO Amitabh Kant highlighted the strategic need for monetisation and the various modalities therein.

Echoing the finance minister's words, Kant emphasised that the partnership between Central and state agencies is imperative for leveraging the enormous resource efficiencies of the private sector and for recycling public funds for new infrastructure creation.

According to the statement, DIPAM secretary Tuhin Kanta Pandey briefed the participants about the monetisation of non-core assets and divestment of public sector enterprises, including the transactions currently underway.

Pandey also highlighted the potential monetisation opportunities for states and the pre-requisites for being successful in this regard.

The participants were provided with a holistic overview of the asset monetisation space through presentations on the experiences of asset owners from the public and private sectors.

NHAI chairman Sukhbir Singh Sandhu shared his experience of successful monetisation of National Highways through mechanisms such as Toll Operate Transfer and Infrastructure Investments Trust.

Bringing in the state perspective in this space, the statement said the Maharashtra State Road Development Corporation discussed its experience in the monetisation of the state expressway.

Macquarie India, KKR and IndiGrid shared investors' perspectives on selection and investment in brownfield assets, it added.

Niti Aayog along with the Department of Investment and Public Asset Management (DIPAM) had organised the virtual workshop.

Over 300 participants, including state and UT secretaries for transport, power, public works department, attended the workshop.

Photograph: ANI Photo