India: 81 billion dollars’ worth of infrastructure assets to be traded

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Indian officials intend to earn 6 trillion rupees ($81 billion) over the next four years by selling state-owned infrastructure assets, according to sources familiar with the situation.

These people asked not to be identified because they are not permitted to discuss the details of the proposal, which includes the sale of road and railway infrastructure, airports, power transmission lines, and gas pipelines. Nirmala Sitharaman, the finance minister, is set to release the road map at 5 p.m. on Monday. In keeping with Prime Minister Narendra Modi’s strategic divestiture programme, the government would retain a presence in only a few chosen areas, while the remainder will be sold off to private investors Through now until March 2022, the government plans to raise up to 1.75 trillion rupees from such sales to make up for the loss of tax revenue due to epidemic.

Sitharaman is expected to announce only plans for monetizing infrastructure assets held by 11 ministries on Monday, despite broader divestment proposals this year that include an initial public offering by Life Insurance Corp. of India and stake sales in companies such as Bharat Petroleum Corp. and Air India Ltd.

Road monetization is expected to generate revenue of 1.6 trillion rupees, while railway monetization is expected to generate revenue of 1.5 trillion rupees, according to the people. Energy assets are expected to attract 1 trillion rupees in value, gas pipelines 590 billion rupees, and telecoms assets 400 billion

We were unable to reach a spokeswoman for the ministry of finance for comment. A further almost a trillion rupees is projected from public warehouses, civil aviation infrastructure, port infrastructure, sports stadiums, and mining assets
“The government does own very valuable assets and this should see investor interest,” said Sonal Varma, economist at Nomura Holdings Inc. in Singapore. “This will be like an asset exchange, where the government sells its infrastructure assets and uses the revenue earned to invest in other infrastructure priorities that it has set”.

It would serve as a medium-term road map for government asset sales, according to a statement released by the think tank NITI Aayog, which Sitharaman revealed in her annual budget speech. In order to reduce the nation’s budget deficit, which Sitharaman anticipates will be 6.8 percent of gross domestic product in the fiscal year that began April 1, down from 9.3 percent the previous year, the income from the asset sales is crucial. A second wave of the Covid-19 pandemic, according to certain economists, will cause the country to fall short of that goal.