Govt Will Sell Assets Worth Rs 6 Lakh Crore To Private Firms: Airports, Railways, Coal Mining

It is being reported that the government is planning to raise Rs 6 trillion or Rs 6 lakh crore ($81 billion) over the next 4 years (2022-25).

It aims to do so by selling state-owned infrastructure assets which would help with the Centre’s finances and its budget deficit.

Benefits For The Government

The budget deficit could be trimmed and is expected to be 6.8% of the gross domestic product in the financial year that began April 1.

This is a drop from  9.3%  observed in the previous year.

The proceeds from the sales will be used to create new infrastructure, “build multiplier effect on growth and revive credit flow”, according to Niti Aayog CEO Amitabh Kant.

Top 3 Sectors

Among those earmarked for sale are road and railway assets, airports, power transmission lines and gas pipelines.

Railway, airports and coal mining have been picked to be the top 3 sectors to be monetised.

Under the scheme, 15 railway stadiums, 25 airports and 160 coal mining projects will be put up for monetisation.

Revenue Breakdown

Rs 1.6 trillion is expected to be raised from monetisation of roads.

• Rs 1.5 trillion- railways
• Rs 1 trillion- Power sector assets
• Rs 590 billion- Gas pipelines
• Rs 400 billion- Telecommunication assets

A further Rs 1 trillion could be raised from sales of public warehouses, civil aviation and port infrastructure, sports stadiums and mining assets.

Overall Plan Of The Government

The plan is aligned with Prime Minister Narendra Modi’s strategic divestment policy.

Under the policy, the government presence will be limited to only a select few sectors and the rest will be privatized.

Rs 1.75 trillion has been budgeted from such sales through March 2022 to compensate for the pandemic-linked drop in tax revenue.

Among ambitious plans such as the LIC IPO, stake sales in Bharat Petroleum Corp. and Air India Ltd, other to be monetised infrastructure assets will be announced today by Finance Minister Nirmala Sitharaman.

The assets to be announced fall under 11 ministries.

FM Clarifies What This Means

Sitharaman has clarified that the government is not selling its assets and still maintains ownership.

There will be a “mandatory hand back after a certain time”, she explained.

Kant highlighted the importance of bringing in private players for “better operation and maintenance”.

This Govt Insurance Firm Will Be Sold To Private Firms Before PSU Banks Privatization