Economic Highlights
New Delhi, 30 August 2021
Monetisation
Pipeline
INAPT,
UNIMAGINATIVE POLICY
By
Shivaji Sarkar
Finance Minister Nirmala Sitharaman on August 23 has
enriched the financial vocabulary with a new word ‘monetisation’ – National
Monetisation Pipeline (NMP) – with the “unveiling” of Rs 6 lakh crore ambitious
programmes to hand over to the private parties “management” by 2025 of its
assets in 13 sectors already identified in different ways to put on the sale
block by Manmohanomics.
It is unimaginative way to solve revenue problems. The
sectors included are virtually the same as was decided long back like the
airports, railways, roads, shipping, gas pipeline and many others to monetise
its brownfield infrastructure assets. Of course this is another jargon.
Greenfield and brownfield investments are two types of foreign direct
investment but can include domestic too. With greenfield investing, a company
builds its own brand new facilities from the ground up. Brownfield investment
happens when a company purchases or leases an existing facility.
As per official terms monetisation means transfer of
management and privatization means transfer of ownership. We may define
monetisation as ‘temporary privatization, but how it would finally roll out
depends.
In brief the programmes include road assets, including 22%
of national highways, worth Rs 1.6 lakh crore; over 400 railways stations, 90
passenger trains and other assets - Rs 1.52 lakh crore; 25 airports for Rs 20782
crore; Power Grid and others transmission – Rs 45000 crore; coal mining - Rs
28747 crore; telecom - Rs 35100 crore; shipping - 2828 crore; CWC, FCI
warehousing - 28900 core; realty, hotel assets - Rs 15000 crore; prime Jawahar Lal
Nehru and other national stadia of Sports Authority of India and other
facilities worth Rs 11450 crore.
Conceptually most of these were on the block for long as
public-private-partnership (PPP). In three years, the government expects to
have revenues for meeting expenditures, not building assets.
Indeed, there is political consensus across the spectrum or
should it be called lack of political vision or bankruptcy of ideas! The Nehruvian economy till today is credited
by all as the system that developed assets with great effort and costs to
gradually create a world class image. The IITs and other national institutions
-created talent now command heights in the global system. The dams, public
sector industries, banks, railways, mines and other assets added to the
national glory, created jobs and standardised the processes.
Many were not in very happy shape in private hands. Even
some prime banks were often ‘rumoured’ to be going for liquidation. The nation
with great efforts saved and built many others sometimes through takeover of
private assets. The 1960s were used by many private corporate to send their
sick units for ‘temporary management’ to government sector for nursing the
health back as if the public sector were ‘industrial hospitals’.
The wheel has taken a full circle. It is now being sent back
to the private – with “ownership” in government because of supposed poor
finances. The PSUs those days had delivered but would the private sector do it
or as is the practice might likely extort the facilities for their own benefits
and finally with possible poor maintenance it could dump heavy financial burden
on the government and many properties may even get encroached upon.
It is also not easy to comprehend why the fad of
Manmohanomics for selling or leasing to private should continue. There can be
national assets in either of the sectors. It appears that the confusion induced
by liberalization and globalisation of parting with built-in infrastructure to
the private is still being considered the panacea. It must change. Political parties, including
the Left and regional like TMC or TDP, instead giving new concept are merely
debating on the process to get rid or may be greed to oblige their cronies.
The so-called free economy enunciated by the Narasimha Rao
government meant creation of assets in all sectors. But Manmohan Singh, P.
Chidambaram, Montek Singh Ahluwalia changed it to handing over public assets to
the large private companies. The policy with minor changes was adopted by all
subsequent governments. It is now 30 years of “poverty management” of the
nation’s assets. Even in the present context, Congress leader Rahul Gandhi says
he is not against NMP but why the sale should be confined to the selected few.
Most other parties share the view.
The roads to be handed over are in good shape and the
private would only start exploiting these for maximizing their profits at
public cost by increasing toll, fees and seeking remission of lease fees
showing managed losses.
The railways started with much fanfare in the 1990s called
commercialising its assets. Little has been achieved. Even of its 90 trains
only two were leased out. Again nothing new, some private parties in yore also
used to run pilgrim or tourist specials for a fee. The Metro in Delhi is
running into losses of Rs 1785 crore against measly surplus of Rs 1084 crore in 2019. All other metros have
huge losses in Bengaluru, Kochi, Jaipur, Lucknow, and Noida. The unimaginative
leasing out of stadia would affect the poor, who bring medals. Coal mines or
power transmission would again go back to the mafia and governance would be
powerless.
There is a myth that Air India and BSNL were devastated by
officials. The officials are part of the process under political masters. But
can the nation forget how, under UPA Civil Aviation Minister Praful Patel,
profitable sectors were banned for the national carrier to help private
airlines profit? Similarly, the BSNL was forced to lend national phone and
internet backbones to create private sector giants turning it into a sick unit.
No one answers why VSNL was sold to its rival. Of late, the failed experiment
is being thrust on the railways and National Airports Authority causing severe
rise in fares and airport charges.
Why was the sick Ruchi Soya taken over? Does it have links with
sudden spurt in cost of edible oils because of large international purchases
for the new mission of importing edible oil? Its study may reveal how
monetisation will unfold to help consumers or otherwise.
Political parties do not discuss the welfare of the consumer
or the people. Inflation is shooting up, policies on taxing savings is sending
the nation haywire. Mindless privatization by various names is killing both the
private and public. The right course for the economy has to be sought through a
national open debate.---INFA
(Copyright,
India News & Feature Alliance)
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