Asset Monetization

(The Hindu)

Context: 

  • Recently, NITI Aayog and the Department of Economic Affairs formulated a workshop on asset monetization on a national level.
  • The workshop was headed by Finance Minister Smt. Nirmala Sitharaman.
  • Chief Secretaries of States and Administrators of Union Territories, secretaries for transport, power, public works department of States and Administrators of Union Territories also attended the meeting.

Objective: 

  • The strategic context of core and non-core asset monetization.
  • Modality of monetization by public sector entities.
  • Steady economic reforms.
  • Investment planned under the National Infrastructure Pipeline (NIP) is critical for boosting growth.
  • Need for monetization as a different funding strategy and to increase operational value.
  • Effective conceptualization of a collaborative partnership framework between the Centre and States for realizing the country’s infrastructure vision and growth agenda.

Success story: 

  • Successful monetization of National Highways through mechanisms such as Toll Operate Transfer and Infrastructure Investments Trust.
  • The workshop discussed the various benefits and pre-requisites of leveraging private sector participation for monetization. 

Keywords:

  • Core asset: The assets, which are critical to a company and its business operations. Core assets are needed for the institution to generate revenue have broader outreach and remain profitable. Core assets can include equipment, machinery, factories, and distribution channels, etc.
  • Non-core assets: These are known as non-operating assets. These are assets that are no longer considered core to an institution’s operation or are no longer in use. This could include property, plant, and equipment, an associate, or equity method investments, etc.

    Download Daily Current Affairs of 10th March 2021