Asset monetisation

Asset monetisation

Subject: Economy

Context: The government is working on a Rs 6-trillion monetisation plan that will include a range of assets, disinvestment secretary TuhinKanta Pandey said on Wednesday, more than double the target announced by the prime minister earlier this year. The national monetisation plan will have a range of assets from Power Grid pipeline to national highway

Concept:

• Asset monetisation is the process of creating new sources of revenue for the government by unlocking the economic value of unutilised or underutilised public assets.
• A public asset is any property owned by a public body, tangible or intangible.
• These include roads, railways, stations, pipelines, mobile towers etc. or financial assets like shares in Central Public Sector Enterprises (CPSEs), securities and dividends.
• A sub-optimally utilised or unutilised asset is one that is not using its maximum potential which could otherwise be attained by exploiting it commercially at a market valuation.
• The government’s asset monetisation programme aims to correct this anomaly and get the returns it invested in these public assets, and create hitherto unexplored sources of income.
• It has been the Centre’s efforts to attract the private sector in the private sector in this process, to help explore the real asset value through business ideas and technology.
• The government does not need to sell assets and it does well to protect assets which give healthy returns. This process is only to innovate and enrich an asset which has largely been unresponsive in terms of revenue.
• The Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance has been made the nodal department for the strategic stake sale in the Public Sector Undertakings (PSUs).
• DIPAM and NITI Aayog will jointly identify PSUs for strategic disinvestment.