Govt has increased Asset Monetisation Target for FY25, More Privatisation in near Future

The NITI Aayog has increased the asset monetisation target for the financial year 2024-25 (FY25) by Rs 23,000 crore, bringing it to Rs 1.9 trillion. This move aligns with the broader National Monetisation Pipeline (NMP), which has a four-year target of Rs 6 trillion. Click here to read more news on Privatisation.

Progress of the National Monetisation Pipeline (NMP)

Launched by Finance Minister Nirmala Sitharaman in August 2021, the NMP achieved Rs 3.9 trillion in asset monetisation over the first three years (up to 2023-24), slightly under its target of Rs 4.3 trillion. Despite the revised FY25 target of Rs 1.9 trillion, the government is expected to miss the overall Rs 6 trillion target by roughly Rs 20,000 crore.

Target Finalisation for FY25

After a series of inter-departmental discussions in August, NITI Aayog, which serves as the central policy think tank and nodal department for asset monetisation, finalised the target for FY25. Asset monetisation involves partnering with private operators to manage revenue-generating government assets, with the goal of recycling capital into the Rs 111 trillion National Infrastructure Pipeline.

Sector-Wise Targets for FY25

• Highways: Monetisation is expected to generate Rs 54,000 crore.
• Coal Blocks: Expected to contribute Rs 55,000 crore.
• Railways, Power, Petroleum & Natural Gas: Combined, these sectors are expected to raise Rs 46,000 crore.

While many ministries have fallen short of their original NMP targets over the past three years, most have managed to meet revised targets. Sectors such as railways, telecommunications, warehousing, civil aviation, and sports infrastructure have underperformed.

Ministry of Railways and Civil Aviation Initiatives

NITI Aayog has urged the Ministry of Railways to focus on the commercial development of railway land and encouraged the Ministry of Civil Aviation to pursue public-private partnerships for the development of 11 airports.

Monitoring and Oversight by Core Group of Secretaries

The Core Group of Secretaries on Asset Monetization (CGAM), chaired by the Cabinet Secretary, conducts regular reviews to track progress and resolve any structural issues across sectors under the NMP. NITI Aayog has also stressed that inter-ministerial coordination helps address challenges in implementing NMP targets.

Performance of Key Ministries

• Ministry of Railways: Monetised Rs 20,417 crore worth of assets over the past three financial years, achieving 30% of its revised target.
• Warehousing: Monetised 38% of its targeted Rs 8,000 crore in assets.
• Ministry of Civil Aviation: Achieved only 14% of its targeted Rs 2,600 crore in asset monetisation.

Strong Performance in Coal and Mining Sectors

The Ministry of Coal has far exceeded its initial four-year target of Rs 80,000 crore, achieving Rs 1.54 trillion in monetised assets. Additionally, Rs 32,000 crore was raised from the monetisation of mines, surpassing the revised target of Rs 7,300 crore.

Plans for Second Monetisation Pipeline

Officials have indicated that discussions have begun on establishing a second asset monetisation pipeline to cover the next five-year cycle, ensuring continued progress in the monetisation of government assets. Click here to read more news on Privatisation.