Business News/ Industry / Energy/  Coal ministry asked to chip in for laggards

NEW DELHI : As several ministries have been lagging in their progress on asset monetization, the coal ministry which has surpassed its targets, has been asked to now try and make up part of the targets missed by other ministries, said two people aware of the development.

Only a few ministries including coal, shipping and mines, have witnessed a robust monetization progress. But some few others such as railways and telecom ministries have not fared so well.

“Given the performance of coal ministry, NITI Aayog has asked the ministry to further enhance its monetization to help reach nearer to the government’s overall target," said one of the people mentioned above.

For FY23, the Centre had set a target of 1.62 trillion and till FY25 the government seeks to monetize assets worth 6 trillion under the National Monetisation Pipeline (NMP).

In FY23, the coal ministry is likely to achieve asset monetization of 50,000 crore, way above the 30,000 crore target set by NITI Aayog. Similarly, in the previous fiscal (FY22), the ministry achieved 40,104.64 crore under asset monetization, compared with the NITI Aayog target of 3,394 crore.

Answers to queries sent to the ministry of coal and NITI Aayog were awaited.

In a recent interview, coal secretary Amrit Lal Meena said the growth in asset monetization had largely come from coal mine auctions.

“In FY23 we will be achieving over 100% of our target. The target was at 30,000 crore. We will be touching almost 50,000 crore. Next year’s target is yet to be fixed, but as far as the coal ministry is concerned, we will have a higher target to achieve. The surplus monetization was possible due to coal mine auctions. Our asset monetization realization next year will be a little higher," Meena said.

On Wednesday, the government launched the seventh round of auctions of coal blocks, putting 106 mines on sale. Of these blocks, 61 have been partially explored and 45 fully explored. In November, the government launched its biggest coal mine auction offering 141 blocks.

While the coal ministry has performed well, railways, telecom and petroleum ministries have not fared well so far.

In FY23, according to the National Monetization Pipeline, railways’ monetization target included 120 stations, 30 trains and 1,400 km of track. However, not much progress has been made.

For the ministry of petroleum and natural gas, oil and gas companies are yet to find a viable and profitable way to monetize their assets. Under the initial plan, the energy companies were to transfer some of their pipelines to infrastructure investment trusts (InvITs) and sell stakes in the pipelines.

However, it was found that monetizing pipelines via InvITs would be expensive, after which the government agreed to shelve the plan and asked companies to come up with better alternatives.

Pipeline assets considered for monetization in FY22-25 have an aggregate length of 8,154 km.

In FY22, transactions worth 96,000 crore under the NMP were completed largely backed by coal and mining assets, exceeding the target of 88,000 crore.

The NMP has been designed for a dozen infrastructure line ministries and are spread across 20 asset classes. The announcement was made in the FY22 budget with Niti Aayog given the mandate to develop it. The ambitious asset monetization plan was announced to increase financial resources for the National Infrastructure Pipeline.

Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Updated: 31 Mar 2023, 12:43 AM IST
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