The government on Wednesday dismissed the Opposition’s claims that the country’s “crown jewels” were up for sale under the ₹6 trillion National Monetisation Pipeline (NMP) unveiled on August 23. It insisted the asset monetisation is distinct from slump sales. “The framework for monetisation of core assets under NMP clearly mentions that none of the assets in NMP is up for sale,” the government said in a statement.
The government plans to raise ₹88,000 crore this year by leasing infrastructure assets of the central government ministries and state-run companies under NMP. The funds will then be used to build new infrastructure assets, helping boost economic growth. Roads (27%), railways (25%), power (15%), oil and gas pipelines (8%) and telecom (6%) are the top five sectors by value under the monetisation programme.
The government maintained the assets have been put on a “limited period lease” and will be retaken later. It said the monetisation idea was not new as it was taken up earlier as well at the central and state levels. “In fact, it was the former (Congress-led) UPA (United Progressive Alliance) government at the Centre that had taken the initial steps towards… privatisation of Delhi and Mumbai airports.” It added non-discriminatory access of the assets to the public will follow the monetisation and there will be no monopoly.
The government said the bulk of the infrastructure asset base will continue to be under the public sector after monetisation. “So public sector will continue to operate, run these assets and build more assets that can be further monetised.” The government called the monetisation “structured contractual partnership”. It insisted the private partners will only “operate and maintain the assets and return them to the government on completion of the transaction period.”
Congress spokesperson Gourav Vallabh rejected the government’s explanation as irrelevant. “Public assets which were created with the taxpayers’ money will be given on lease. The people, who are going to lease them, are going to get that expense (for leasing) from public sector banks. The same assets will later be put in front of the same public who will have to pay for them (to utilise their services),” Vallabh said. He added technically this is a “grand clearance sale”.
Vallabh said the monetisation contracts of airports such as in Ahmedabad, Lucknow, Mangaluru, Mumbai, Jaipur, Guwahati, and Thiruvananthapuram were given to those who have never had any experience in such management. “Were they handling airports, were they into the business of airports? What was their experience in airports? Nothing at all. The same is going to happen with the rest of the assets of the country.”
He said many gas pipelines, ports, warehousing assets, passenger trains, transmission lines, which the government seeks to monetise, are strategic assets. “There cannot be a more strategic asset than transmission lines because the country’s entire network, be it defence or whether it is normal day to day electricity consumption, everything depends on them.” He added the government is transferring strategic assets, not to one but two of their friends and everyone knows who they are. “I would not call this monopoly, but this is a duopoly,” he said. Vallabh added the government is leasing the assets for the “useful life” which is another way of sale. “The value of an asset after its useful life is that of scrap.”
Vallabh said it was confusing to see the government is deliberately creating a monopoly in the economy. “Even the developed economies, be it the US or the UK, are making laws to do away with monopolies… and cartels. In India, assets created in the last 70 years are being used by the government to create monopolies.”
He cited the government’s claim to raise ₹six trillion from the monetisation of assets and asked are they not yielding any revenue at the moment. “What is the current revenue of these assets… ?” He added for the last three years, the government has promised 100 lakh crore investment in infrastructure. “Where are they? You have said that you will generate six lakh crores from monetisation… where will the rest of 94 lakh crores come from?”
Vallabh referred to the government’s claim that the “formulation of NMP included extensive consultations” with the stakeholders from the industry and experts. He added NMP was not even discussed in parliament. Vallabh called the government clarifications “haphazard” and said apparently finance minister Nirmala Sitharaman is not a good listener. “She should specify when this was discussed in Parliament and which trade unions did you (the government) have discussions with.”
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