THE MONETISATION GAMBLE

MID THE DOOM and gloom of the pandemic in 2021, two instances showed the government a way forward, financially speaking. In April, Power Grid Corporation of India became the first PSU to go public by floating an infrastructure investment trust (InvIT), which included mainly high-voltage transmission lines and substations, raising more than ₹7,700 crore. Then, in November, Nitin Gadkari, Minister of Road Transport and Highways, took to Twitter to announce that the National Highways Authority of India’s (NHAI) first InvIT, which comprised five toll roads spanning over 390 km, has raised ₹5,000 crore. This success spawned a plan to raise another ₹3,000 crore.

These two examples show that if the government wants to monetise assets, there is enough private sector interest in “viable, structured and investable projects”, says Manish Aggarwal, Partner & Head, Infrastructure and Special Situations Group, KPMG India.

To offset the steep rise in its capital expenditure and borrowing due to the pandemic, the government aims to raise ₹6 lakh crore by FY25 by monetising 20-plus brownfield state- and public sector-owned assets across sectors (see ). This National Monetisation Pipeline (NMP) is a win-win for the government, which gets to fill its coffers, as well as the private sector, for whom the attraction is steady cash flow from prized assets. “With the launch of the NMP, infrastructure investors have a relatively lowrisk option because, unlike new infrastructure, asset monetisation covers operating assets, which have already started generating revenues. So, there will be a lot of traction from long-term investors,”