BackAssets to the rescue
An initial round of auctions could clarify the current market demand for rented assets. The process and other aspects of this policy can be fine-tuned based on that
PremiumThe government on Monday unveiled a four-year National Monetisation Pipeline to raise up to ₹6 trillion for funding infrastructure spending in the country. Brownfield assets in various sectors held by the government or public-sector firms will be put up for liquidation, with roads, railways and power forming the top three sectors.
If the plan puts to productive use unutilized or underutilized assets of the State, it should serve as more than just a coffer-filler, even if the primary goal is to raise money for India’s infrastructural gaps to be plugged. The idea of offloading state-owned property has long been shadowed by political anxiety over accusations of cheap sellouts that could follow, given the difficulty of getting fair valuations. It is thus interesting that asset ownership under this plan will remain with the government, and it will regain possession once the lease expires. This will lower the Centre’s risk of deals getting stuck midway but needs to be weighed against the possible deterrence effect on prospective buyers. An initial round of auctions could clarify the current market demand for rented assets. The process and other aspects of this policy can be fine-tuned based on that.
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