Leasing Vs Selling (National Monetisation Pipeline)

Being an educator it's my responsibility to educate people to understand the difference between Leasing an asset and selling an asset. Before making difference between both let me clarify some basic terminology that needs to be understood before understanding the topic.

Asset Monetisation-  Monetising operating public infrastructure assets for new infrastructure construction.

Capital Expenditure- Capital expenditure is the part of the government spending that goes into the creation of assets like schools, colleges, hospitals, roads, bridges, dams etc.

Leasing- A contract between a lessor and a lessee for the hire of a specific asset for a specific period on payment of specified rentals.

Selling of an asset- The action of government selling or liquidating an asset.

Brown-Field Asset- Asset which already exists and the government is leasing it for the specific time period.

So here I am going to explain the National Monetisation Pipeline. Twitter and other social media platforms were flooded with hashtags like Government is selling everything which was constructed in 70 years, but these trends forced me to raise the question of why is a set of people trying to make a false narrative about the policy NMP? On 23rd August 2K21 Finance Minister Nirmala Sitharaman introduced the National Monetisation Pipeline, the policy which is going to set a benchmark in coming years. We are going through Covid-induced economic and fiscal shocks, Government is leasing its Underutilised brownfield asset to private players to generate revenue from it and use this revenue as capital expenditure. There is a very big difference between Selling its asset and Leasing it on Rent. Leasing an asset means the government bringing underutilized assets to a private player for a specific time period generating money from them The private participants will have to hand over the assets to the government after a pre-determined period of time. The money obtained through the monetization exercise will be channelised into infrastructure building.

The NMP estimates an aggregate monetisation potential of Rs 6 lakh crore through core assets of the Central government, over a four-year period, from FY22 to FY25. The government will monetise assets ₹ 1.6 lakh crore from the road sector, 1.5 lakh crore from the railway sector and 79000 crores from the power sector. The centre will also monetise 20800 crores from airports, 13000 crores from ports, 35000 crores from telecom, 11500 crores from stadiums and 45200 crores from power transmission sectors.

Once Billy Boy Franklin said and I quote “If a lie is repeated often enough all the dumb jackassess in the world not only get to believe it, they even swear by it."

 

The policy NMP will vivify the Indian economy.

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Jai Hind Jai Bharati.

By GAURAV SINHA