In the upcoming Union Budget 2023-2024, Finance Minister Nirmala Sitharaman is expected to emphasize on monetization of railway assets to generate more funds for the Indian Railways.
The target of monetizing railway assets worth Rs 17,000 crore in the year 2022 could not be achieved due to very poor response from the private sector. The government is still expecting good returns despite investors losing interest in railway assets.
what is asset monetization
The assets are directly monetized by models such as Operate Maintain Transfer (OMT), Operate Operate Transfer (ToT), Public Private and Partnership (PPP) and Operations Maintenance and Development (OMD).
Even in demonetisation, the government leases the properties for a fixed period of time for operation and redevelopment by a private organization and does not sell the property. Sources said that there is a possibility of setting a specific target for monetization of railway assets, though it is a reasonable target.
Under monetization of assets, the government transfers the rights to the revenue to certain private parties for a specified transaction period, in return for a share of the revenue and a commitment to invest in the asset.
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