Budget 2021 proposes to monetise assets to meet higher capital expenditure

Centre failed to meet its disinvestment target in the ongoing financial year, however, Union Budget 2021-22 proposes to raise Rs 1.75 lakh crore from disinvestments and strategic sales. These include sale of assets like BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans and Neelachal Ispat Nigam. Besides, the government looks to monetise the operating public infrastructure assets for finding funds for new infrastructure creation.

Finance Minister Nirmala Sitharaman proposed in the Budget to create a National Monetisation Pipeline, comprising of potential brownfield infrastructure assets. The asset monetisation dashboard will also be created for tracking the progress and to provide visibility to investors, she said. Under the plan, National Highways Authority of India (NHAI) and Power Grid Corporation (PGCIL) will sponsor one InvIT each for attracting international and domestic institutional investors. Five operational roads with an estimated enterprise value of Rs 5,000 crore will be transferred to the NHAI InvIT. Similarily, the transmission assets of a value of Rs 7,000 crore will be transferred to the PGCIL InvIT.

Indian Railways will monetise the dedicated freight corridor assets for operations and maintenance, after commissioning, Under the proposal. The next lot of airports will also be monetised for operations and management concession.

Besides, the government will roll out other core infrastructure assets like operational toll roads of NHAI, transmission assets of PGCIL, oil and gas pipelines of GAIL, IOCL and HPCL, airports in Tier II and III cities, railway infrastructure assets, warehousing assets of Central Warehousing Corporation and NAFED, and sports stadiums.

The disinvestment of assets that got delayed because of COVID-19 will be completed in 2021-22, SItharaman said. "Other than IDBI Bank, we propose to take up the privatisation of two public sector banks and one general insurance company in 2021-22. This would require legislative amendments and I propose to introduce the amendments in this session itself," said the minister. The minister will bring the requisite amendments in this session itself for the IPO of LIC of India.

The government will also present a policy of strategic disinvestment of public sector enterprises for providing a roadmap for disinvestment in all non-strategic and strategic sectors. The government will maintain only a bare minimum of central public sector companies and the rest will be privatised.

Idle assets will not contribute to Atmanirbhar Bharat, Sitharaman said. "The non-core assets largely consist of surplus land with government ministries/departments and public sector enterprises. Monetising of land can either be by way of direct sale or concession or by similar means. This requires special abilities and for this purpose, I propose to use a Special Purpose Vehicle in the form of a company that would carry out this activity," she added.

Sitharaman proposed Rs 5.54 lakh crore for capital expenditure, which is higher by 34.5 per cent compared to last budget.

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