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National Monetization Pipeline - Coggle Diagram
National Monetization Pipeline
What is Monetization?
Tools
Infrastructure Investment Trusts (InvITs)
Real Estate Investment Trusts (REITs)
In return, it gets upfront money, a revenue share, and commitment of investments in the assets
Transferring revenue rights to private parties for a specified transaction period
Mostly by PPP Model
Background
Monetization as a key instrument to raise resources
for financing infrastructure needs
Concept:
Vijay Kelkar on roadmap for fiscal consolidation in 2012
NOT Privatization
Doesn't add to existing government debt
NO ownership transfer of the underlying asset
Monetization: “Asset Recycling” of existing projects
Privatization: sell state-owned companies
Particularly brownfield assets where investment has already been made
It can can unlock efficiencies that government cannot.
List of Assets
2.86 lakh km of fiber assets and 14,917 towers in the telecom sector
6 GW of hydroelectric and solar power assets
8,154 km of natural gas pipelines
2,8608 Ckt km worth of power transmission lines,
3,930 km of petroleum product pipelines
26,700 km of roads, railway stations, train operations and tracks
Merits of the NMP
Mobilizing Private Capital
Not Privatization, hence public support
Streamlining asset creation
Boost to Cooperative Federalism (C-S)
Keeping fiscal deficit at check
Resource Efficiency
Promoting Public-Private Partnership collaboration
Challenges Associated
Uncertainty of proper execution
Dispute resolution mechanism
Slow pace of privatization in government companies
Level of capacity utilization
Asset-specific challenges
Lack of identifiable revenues streams
Way Forward
Dispute Redressal Mechanism
Multi-stakeholder approach
Solutions lie in execution