Economy

PM Modi makes strong pitch for privatisation, asset monetisation

Our Bureau New Delhi | Updated on February 24, 2021

Government has identified 100 assets whose sale could garner ₹2.5-lakh crore

Prime Minister Narendra Modi on Wednesday said the government has identified 100 assets for monetisation that could fetch as much ₹2.5-lakh crore for the exchequer.

Putting his weight firmly behind privatisation and asset monetisation at a webinar organised on Department of Investment Promotion & Asset Management (DIPAM) related announcements in the recent Budget, Modi highlighted that a ₹25-trillion opportunity is up for grabs for the private sector in the country’s mega ₹111-lakh crore National Infrastructure Pipeline (NIP) projects over the next five years.

He made a strong pitch for a bigger role for the private sector in the growth of the Indian economy and stressed that wealth creators are also important for the country.

Asserting that government is going ahead with the mantra of ‘monetise and modernise’ while reaffirming the stance that it (government) has no business to be in business, Modi said the amount collected from monetisation and divestment would be used to fund development projects. Asset monetisation and privatisation decisions would help empower Indian citizens, he said.

Implementation plan

The main objective of the webinar — attended by key decision makers from sovereign wealth funds and pension funds, domestic and international investors, investment banks, advisors and experts — was to jointly develop an effective implementation plan for the reforms on privatisation and asset monetisation announced in the Budget. The webinar was also attended by Finance Minister Nirmala Sitharaman, NITI Aayog Vice-Chairman Rajiv Kumar and senior officers from 14 ministries of Central government.

Modi said that when government monetises, that space is filled by the private sector of the country. Private sector brings investment and best global practices with it.

“I can understand the need of any public sector enterprise if it is fulfilling the needs of any sector. It is the responsibility of the government to supply support to country’s enterprise and business but there is no need for government to be in business”, he added.

Many public sector enterprises are loss-making and several of them need the support of public money. “It burdens the economy”, he added.

Making a case for privatisation, Modi said that public sector enterprises should not be run because they were started many years ago and were someone’s pet project. The Budget has set the stage to propel India back into a high growth trajectory with strong focus on privatisation and asset monetisation. The Budget also focuses on the strong partnership of the private sector in India’s development. Also, the scope and targets of public-private partnership have been put forward with clarity.

“If the public sector is important, so is the participation of private enterprises. Should members of the IAS alone be tasked with everything? Can Babus do everything? If we have entrusted the IAS with running fertiliser factories and chemical enterprises, then they are supposed to fly planes as well. What type of capability have we acquired by handing over the country to babus? Babus belong to us and so do the youth. The more opportunity we give to our youth, the more he will benefit”, Modi said.

The FDI friendly environment in India and incentives like production linked incentive have increased investors’ enthusiasm, clearly visible in the FDI inflow in the last few months, Modi said.

The Prime Minister also said that complexities associated with compliance in India are constantly being improved. The problems relating to logistics are being overcome at a fast pace and the tax system in India is being simplified while transparency is being emphasised, he said.

Published on February 24, 2021

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