National Monetisation Plan: Paving the Road for Sustainable Financing Towards Infrastructure Development
The Modi government’s ambitious and aggressive ₹6 trillion National Monetisation Plan (NMP), high on intent with enabling framework, holds the promise of success, notwithstanding various challenges on the ground.
Vinod Behl
Infrastructure contributes significantly to the country’s GDP and is a key to economic growth. But after the economy got a massive hit due to the Covid pandemic, finding resources for infrastructure development became a challenge. Following this, the central government came up with a road map for capital investment of ₹111 lakh crore in infrastructure under the National Investment Pipeline (NIP) over 6 years, through FY’25.
It is against this backdrop that NMP assumes significance; especially for sustainable financing of infra projects, private money with a long-term horizon is essential, and particularly as the government does not have adequate resources and fiscal space to free up the kind of money needed for such a massive initiative. NMP will help monetise existing infrastructure assets by leasing them out to private firms for a fixed tenure under a revenue-share model. It will help ease fiscal challenge, making funds available for greenfield projects.
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NBM&CW September 2021
