'Missing the mark': Asset monetisation 18% short of target in FY23

Govt stays with Rs 1.79-trn target set by NITI for FY24

The Centre monetised assets worth Rs 1.32 trillion in FY23, against a target of Rs 1.62 trillion, as key ministries, such as railway, road transport, power, and telecom failed to meet its targets. For 2023-24, a Cabinet secretary-headed panel earlier this month restated the Rs 1.79-trillion target as set by the NITI Aayog, according to people aware of the matter.

The target is part of the government’s ambitious National Monetisation Pipeline (NMP) of potential brownfield infrastructure assets which was launched nearly two years ago. The government’s focus on monetisation of operational public infrastructure assets is emblematic of its importance as a key route for raising capital for new infrastructure asset creation. 

One of the persons cited above said ministries/departments that failed to meet their target in FY23 also included the Ministry of Civil Aviation, the Ministry of Youth Affairs and Sports, and the Department of Food & Public Distribution.

On the other hand, the ministries of coal, mines, petroleum and natural gas, and shipping achieved their targets during 2022-23.

To ensure FY24 targets are met, the panel has asked key infrastructure ministries and departments to make asset monetisation their ‘priority’ and an important route for raising capital. During the meeting, ministries and public sector enterprises were also asked to develop a strong pipeline of proposals and increase their capacities.

“The ministries were given these instructions since some of them were only relying on budgetary outlays to fund their capital expenditure, without making efforts to monetise their assets,” the person cited above said.

The Ministry of Road Transport and Highways -- the front runner in asset monetisation in FY22 – could meet only 49 per cent of its target of Rs 17,384 crore in FY23 because some transactions were not concluded due to operational issues. Its target for the current fiscal year is Rs 44,000 crore, which is slated to be met through accruals from the toll-operate-transfer (TOT) model, two rounds of infrastructure investment trust (InvIT), and securitisation of toll.

 The Indian Railways was able to achieve only a fourth of its target, set at Rs 7,750 crore last fiscal year. It is now eyeing asset monetisation worth Rs 30,000 crore in the current fiscal year through colony redevelopment, and private participation in operation of wagons and GatiShakti terminals.

In the case of the power ministry, 62 per cent or Rs 9,436 crore of the asset monetisation target (Rs 15,308 crore) was met in FY23. The new target is Rs 21,000 crore, which is likely to be met through the development of Badam coal mine and securitisation of cash flows from state-owned Power Grid and SVJN assets.

The NMP’s aggregate monetisation potential is Rs 6 trillion through core assets of the central government, over a four-year period from FY22 to FY25. During the first year, monetisation of public sector brownfield assets unlocked a value of Rs 97,693 crore.