New Delhi Central government has exceeded its asset monetization target Closed deals worth Rs 88,000 crore more for FY22 96,000 crore as per an assessment made at a high-level review meeting on Tuesday, a person familiar with the development said.
Sectors that contributed largely to asset monetization include roads, electricity, and mining of coal and minerals. For FY23, Center confirms asset monetization target exceeded 1.6 trillion for which proposals from different ministries are in various stages of processing, said the person speaking on condition of anonymity.
Prominent investors who secured 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 publication.
Total asset sales may actually go up in FY22 1 trillion when the final figures come in, the first person cited above. Finance Minister Nirmala Sitharaman chaired the meeting which was attended by senior officials from the Finance and Infrastructure Ministries and NITI Aayog. Emails sent to the finance ministry and NITI Aayog on Tuesday evening did not elicit any formal response, seeking comment for the story.
The asset monetization scheme was announced by Finance Minister Nirmala Sitharaman in her Union Budget for FY 2012 as a key financing option for creating new infrastructure assets. The plan included a pipeline of 6 trillion worth of assets will be monetised over a period of four years till FY25. Government expects sale of assets acquired in FY12 to trigger another 9 trillion as asset acquirers, raises debt and expands its operations. The idea is to increase private investment in infrastructure, a key element of the government’s economic recovery strategy.
In FY22, 390 km of road projects were monetised under the Infrastructure Investment Trust mode and three ‘toll-operate-transfer’ bundles were auctioned, the person said. got it 23,000 crore, the person said. In the power sector, transmission and hydropower property value 9,500 crore has been monetised. In the mining sector, 31 mineral blocks have been auctioned with an estimated annual monetization value 18,700 crore in FY22. These have helped the states to mobilize resources for capital funding requirement.
“The asset monetization program will be closely monitored in FY13. The ratio of private debt to GDP in India is around 56 per cent, which is lower than many other countries. The asset sale program will facilitate more debt and equity investments in the infrastructure sector. This will be done in active partnership with the states,” said the first official cited above. States and Union Territories have significant infrastructure asset base which can be leveraged to increase their investments in the sector, the official said. .
Following up on the construction of the center 111 trillion worth of greenfield infrastructure projects for which it needs to generate resources. It is also financing the projects undertaken by the states through long term loans with a view to creating assets in line with the local needs. The Center has also created a development financial institution – the National Bank for Financing Infrastructure and Development – to provide long-term finance for projects.