Centre seeks states’ backing in asset monetization drive to boost infra

Union finance minister Nirmala Sitharaman on Tuesday urged central and state agencies to collaborate actively for the government’s asset monetization drive for FY22 which will help mobilize funds for building infrastructure.

At a meeting organized by federal policy think tank NITI Aayog and the department of economic affairs, Sitharaman called for “a proactive and collaborative approach” by central and state agencies for achieving the goals of the national asset monetization pipeline, according to a statement issued by NITI Aayog.

Sitharaman had announced the asset monetization drive in February under which functional assets, such as airports, toll roads, gas pipelines, railway infrastructure and warehouses of central government-run companies, would be monetized to finance infrastructure building.

The minister’s emphasis on active collaboration among the agencies gains significance considering that the Kerala government had earlier objected to the privatization of the Thiruvananthapuram airport, resulting in a delay. States’ backing would make asset monetization hassle-free, she added.

At the meeting attended by over 300 people, Sitharaman engaged with the chief secretaries of states and administrators of Union territories, the statement said.

The strategic context of core and non-core asset monetization, its need, modality and experience so far were discussed at the meeting. Sitharaman explained the infrastructure investment planned was critical to boost states’ growth.

Prime Minister Narendra Modi had last month urged chief ministers of all states to sync their budget priorities with that of the Centre for faster development and emphasized on the need for synergy to deliver a big push to infrastructure building and self-reliance.

NITI Aayog chief executive officer Amitabh Kant, who was present at the meeting, said the partnership between central and state agencies was needed to leverage the enormous resource efficiency of the private sector and for recycling public funds for new infrastructure creation, according to the statement.

The idea is to have a joint approach by the central and state governments to make asset sales hassle-free and eliminate avoidable disputes. The meeting conceptualized a collaborative partnership framework between the Centre and states for realizing the country’s infrastructure growth agenda, NITI Aayog said.

Sitharaman said in a tweet that asset monetization needs to be viewed not just as a funding mechanism, but as an overall strategy for bringing about a paradigm shift in infrastructure augmentation and maintenance.