Understanding ‘National Monetization Pipeline’: The infrastructure way

Finance    31-Aug-2021
Total Views |
-Vedant Vinayak Kulkarni 
 
Finance Minister Nirmala Sitharaman launched National Monetization Pipeline or NMP. NMP is a visionary scheme of the central government to bring out reforms in the covid struck the world and to pump the money in the Indian economy using the Indian government held non-using or underused assets. The opposition already started with many of their problems with this scheme.
 
 
Finance minister Sitharam
 
Let’s first know what this whole scheme is about. So, the Indian Government is planning to use its assets in a way so they can be a medium t earn for the Government. Various assets like roads, railways, mining sector assets, petroleum and oil products, textile, and a total of 12 ministries with their asses will be working together under this scheme. These assets
are then further to be leased out to the private buyers and the rent going to be collected from them is estimated to be 6lakhs crore rupees in the coming 4 years. Total investment under this NMP has figured around 100 lakh crore rupees in the coming 15 to 20 years.
 
Also Read: BIG BULL is ready to fly…
 
NMP is set to boost infrastructure growth, which requires long-term capital that banks are normally not keen to finance. To pave out of the whole financial crunch the nation is experiencing in this COVID-19 situation, it's eminent to take some actions about the assets which we have gathered throughout the years and by monetizing those assets, the cashflow and work demand will also rise resulting in a subtle increase in jobs around the labor as well as it and industrial structure. A whole nationwide job spree will likely come along with the elevated level of services for the people ultimately.
As said earlier, Various industries are going to be part of NMP but the highest budgeted ministries are going to be Roads, Railways, Power, Telecom, Oil & Gas pipelines. Assets from these industries spread across India are going to be utilized and make revenue out of it. 26700km of roads, 90Passenger trains, 400 stations, and many more assets will be monetized in the coming future.
 
Various similar projects are also underway in many of the countries. For example, Australia also used a similar schemed Victoria PPP model. They named it the Australian government’s Asset Recycling Initiative or ARI which provided the necessary financial boost infrastructural development in the project-specific states. With a capital cost of just above $A50 million, Australia raised over $17 billion for new infrastructure development projects across Australia.
Similar schemes are also implemented by various other countries around the globe like Indonesia, South Korea, Brazil, Mexico, Singapore, etc. revenue is collected out of these monetized assets used in the building of the nation in a literal sense.
The Government appointed 'Niti Ayog' as the governing body to oversee NMP and they set to meet the discuss developments happening regularly.
.

Infrastructure Boom due to NMP:

The use of Infrastructure Investment Trust (InvIT) and Real Estate Investment Trust (REIT), which acts just like a mutual fund by creating a pooled investment which then flows to infrastructure and real estate, will allow people of India can invest in the same assets which opposition yelling that it's been sold out. quite an irony. some of these InvIT's and REITs are already listed on stock markets. Government assets used by private players and creating a whole new layout of infrastructural growth all over the country create millions of jobs and billions of opportunities to fulfill every hope of every citizen in India. It is the Nobel and ultimate goal of NMP.
 
Providing world-class facilities in a so-called third world country like India can also attract a lot of foreign investments along with the foreign reserve in national treasure can be a major vitamin shot for India economy in the current pandemic situation, the key just is India just have to execute this plan in Sincerest way possible. The time will tell that these reforms were for good as they will prove themselves in the coming years.

NMP Monetization government Indian economy