Friday, September 10, 2021



                                                                                                             Nishith Chowdhury

 The BJP government led by Modi recently unveiled a four year National Monetisation Pipeline (NMP) claiming to garner Rs 6 lakh crore for infrastructure development. In reality, the NMP is aimed to hand over huge functional infrastructural assets of the country to private corporates and big business houses, including foreign MNCs. The corporate cronies of the BJP government will be allowed to mint huge money utilising the assets built with people’s money.

 This is nothing new in the context of India. The process of privatisation of national assets commenced with the onset of neoliberal policy regime since late eighties and the policy declaration on neoliberalism on the floor of Parliament in 1991. Privatisation of state owned industries, services, financial sector, mineral resources and infrastructural institutions was being pursued since then in varying degrees by successive governments at the centre. Ideologues of the big corporate camp and their political agents in governance have been justifying privatisation of state owned assets on the deceptive ground that they lack operational efficiency, professional management and are lossmaking. But in course of time only the highly profit making undertakings, which were in no way inferior to any comparable private entity, were all targeted for privatisation. The exercise actually proceeded through multi-pronged routes, the latest one being the National Monetisation Pipeline – a nefarious design to promote looting of the national asset.

 Privatisation at any cost – motto of the Modi government

 After coming to power seven years back, Prime Minister Narendra Modi has been proclaiming minimum government arguing that the government has no business being in business. Privatisation at any cost and by any means has become the hallmark of his aggressive policy drives.

 However, the trade union movement in the country has been consistently opposing the neo liberal policies from the beginning. The consistent and continuous united interventions by the working class played important role in building road-blocks to privatisation in many sectors thereby slowing down the entire process. Overall, the privatisation drive was not able to fully take off. Given the overall politico-economic scenario, private entrepreneurs both national and global have not shown the expected interest. Wholesale handing over of PSUs to private players could not fully materialise, though the disinvestment proceeds during the last seven years of Modi regime were Rs 3.96 lakh crore, compared to the total earnings through disinvestment of Rs 5.5 lakh crore since the last 30 years.

 In the face of its inability to meet its ambitious privatisation targets, Modi government, is now seeking to hand over the huge state owned infrastructural assets practically free to the private players to make money. The government will remain a junior partner, sharing a small part of the revenue earned out of these assets. That is the sinister design of this so called National Monetisation Pipeline - to hand over productive national assets including vital functional infrastructural assets worth several lakhs crore of rupees to the domestic and foreign private monopolies virtually for a pittance.


In the Union Budget 2021-22, the government laid a lot of emphasis on asset monetisation. It claimed that this is an innovative and alternative means to raise finances for infrastructure. The budget provided for preparation of a ‘National Monetisation Pipeline (NMP)’ of potential brownfield infrastructure assets. Volume I of NITI Aayog’s report on NMP provides guidance for implementation of NMP, detailing the conceptual approaches and potential models for asset monetisation. Volume II is the actual roadmap for monetisation, including the pipeline of core infrastructure assets under central government.

 Deceptive arguments

 The government argues that these are brownfield infrastructural assets, which have been “de-risked” from execution risks. What does this mean? These assets are wholly built with public investment alone. They are being handed over to private players for fully operationalising them and garnering revenues/ user charges. By asserting that these assets are ‘derisked’ the government is reassuring the private players and alleviating their anxieties or concerns about recovering their capital cost. It tries to make people believe that this would encourage private investment for further improving these infrastructures.

 This is an absolutely false and deceptive claim to befool the people. Without having the formal ownership right on the assets, why should those private operators make capital investment in further expanding those assets? Rather those private players are going to increase at will the user charges of the infrastructural facilities. They will fleece the consumers by innovatively commercialising operations to make maximum possible money out of those assets within the transaction period of may be of 30 to 50 years. The government just wants to create an illusion that they would invest to augment and expand infrastructure.

 The government is also arguing that the assets identified for monetisation are those that are either languishing or not fully monetised or are under-utilised. Again a false and deceptive statement! All these infrastructural assets like highways, electricity transmission lines, oil and gas pipelines, railway networks and stations, ports, telecom-towers have witnessed consistently increasing users over the decades. Besides, operational and utilisation levels of the infrastructure also depend on the overall state of economy. The utilisation of power transmission grids network is linked with and depends on the utilisation in indigenous power generation capacity and manufacturing activities in the country. Can the Power Grid Corporation be blamed for the consistent decline in the indigenous manufacturing sector and the resultant gross underutilisation of power?  Can the destructive policy regime of the Modi government, which contributed to this, be a justification for the nefarious monetisation deal?

 Another deceptive claim of the government is that it is not an outright sale; the government is only transferring revenue rights to private parties for a specified transaction period in return for upfront money, a revenue share and commitment of investment in the assets. Whatever the government says, it is an exercise to hand over national infrastructure to corporate houses for a pretty long period against some upfront money, which definitely is undervalued to the extreme. It is an unscrupulous way to hand over national infrastructural assets to private players virtually free.

 Government says that fund so generated through the upfront money and the revenue sharing over the years would be utilised for infrastructure creation and employment generation across the country. Prime Minister earlier announced that privatisation of profit earning CPSUs was essential for economic development of the country and new employment generation. The result is well known. Now almost a similar pronouncement is being made again.


CPSUs and their infrastructural assets have definitely played, and are still playing a vital role in creating a self reliant economy and huge employment generation. They have also contributed to substantial development and expansion of the private sector industries and services. There is no explanation as to how the present exercise is going to help the country and its people in future.


Job losses and unemployment to increase


During the last seven years, the number of employees in the pay roll of PSUs has come down from 1650000 in 2014 to 980000 in 2020.  Unemployment is increasing in a systematic way through the exercises and the motive behind the tall talks has already been exposed.


The NMP will result in further worsening of the already alarming situation of job losses and unemployment. Unemployment rate in our country was already at a 45 years high before the onset of the Covid pandemic. It has worsened since. All available data show the huge job losses due to the Covid pandemic and the associated lockdowns, curfews etc. Workers in the unorganised sector and women were the worst affected; but it was not only the unorganised sector workers, the casual workers etc. Even salaried employees lost their jobs. The BJP government did nothing, neither to protect jobs, nor to provide any relief to the workers who lost their jobs, in terms of cash transfers etc. It was deaf to the demands to the trade unions, eminent economists and all progressive sections of society. Large sections of those who lost their jobs, particularly women, were not able to get back their jobs. Those, who were able to get work, are compelled to work for lower wages and worse working conditions. As past experience shows, workers in the PSUs identified for monetisation will be losing their jobs. Already there are reports about government’s plans for VRS in the public sector undertakings targeted for privatisation. Permanent and decent jobs will be replaced by precarious jobs. The SC/ ST and other socially oppressed sections will by deprived of job opportunities.


Moreover the infrastructural assets targeted for monetisation, i.e., handing over to private agencies for extracting revenue out of them, are employing several thousands of workers and employees in several Govt institutions/PSUs. Transferring their operational control to private hands would inevitably lead to employment loss besides serious degeneration of quality of employment.  


Public assets up for grabs by the corporates


Let us now look at the breakdown of everything that is going to be privatised. According to the National Monetisation Pipeline (NMP) document,

 ·         Roads: The road assets under National Highways Authorities of India as on date is 1,32,499 Km. The assets considered for monetisation during FY 2022 to FY 2025 aggregate to 26,700 km, in lieu of Rs. 1.6 lakh crore. This is 22% of the total National Highways (NHs

·         Railways: The Indian Railways has 7325 stations, track network of 126366 track km with a route length of 67956 km, 13169 passenger trains, 1246 railway goods sheds, 5 Hill Railways, several railway stadiums, railway colonies and a total freight corridor of 2843 km across Eastern and Western Railways.  Key rail assets identified for monetisation during FY22-25 include 400 railway stations, 90 passenger trains, 1 route of 1,400 km railway track, 741 km of Konkan Railway, 15 railway stadiums and selected railway colonies, 265 railway owned goods-sheds, and 4 hill railways worth Rs. 1,52,496 crore

·         Airports: 25 out of the 137 major airports of Airport Authority of India, including Chennai, Varanasi, Nagpur, Bhubaneswar, Udaipur, Dehradun, Indore, Ranchi, Coimbatore, Jodhpur, Vadodara, Patna, Vijayawada, Tirupati are considered for monetisation to fetch Rs 20782 crore. AAI’s residual stake in 4 airports – Mumbai, Delhi, Hyderabad and Bangalore will be divested

·         Power transmission: The government aims to garner over Rs.45200 crore by monetising power transmission assets by FY 2025. The transmission assets for monetisation aggregate to 28608 circuit (ckt) km out of the available 171950 km transmission lines and allied 262 substations with 444738 MVA transformation capacity owned by Power Grid Corporation of India Ltd.

·         Coal mining assets: 160 coal mining assets worth Rs 28747 crore have been identified for monetisation.

·         Telecom assets: Telecom assets worth Rs 35100 crore are identified for monetisation. These include 14197 telecom towers out of the total 69047 owned by BSNL and MTNL, i.e. 21% of the towers and 2.86 lakh km out of 525706 km of optical fibres of BharatNet. The optical fibre laid by BharatNet project aims to connect all villages in the country with high speed broadband network

·         Power generation: 6 GW of hydro and Renewable Energy based power generation capacity worth Rs. 39,832 crore has been identified for monetisation. This comprises the potential asset base of 4912 MW of hydro, wind and solar generation owned by NTPC, its joint ventures and subsidiaries and another 7071 MW of hydro, wind and solar generation by NHPC.

·         Petroleum and products pipelines: The operational product and LPG pipelines operated by Indian Oil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Ltd (HPCL) and Gas Authority of India Ltd (GAIL) in India are 17,432 km. Out of these 3,930 Kms of petroleum & product pipelines worth Rs 22,503 crore has been earmarked for monetisation.

·         Natural gas: The operational network of natural gas pipelines in India spans about 16,900 km with a design capacity of 400 mmscmd. An additional 18,363 km of natural gas pipeline network is approved/under construction stage. Hence, the natural gas grid of India is estimated to expand to 35,263 km in the next three to five years. NMP envisages monetisation of 8,154 Km of natural gas pipeline valued at Rs 24,462 crore.

·         Shipping assets: We have 12 major and over 200 non major ports situated along our 7500 km long coast. We have a vast network of navigable waterways having a handling capacity of 1535 MMTPA. The BJP government has identified 31 projects worth Rs 12828 crore in 9 major ports for monetisation.

·         Warehousing assets – Warehousing assets owned by FCI and Central Warehousing Corporation, having 210 lakh tonnes storage capacity (39% of the existing storage capacity with FCI and CWC) are targeted to be monetised for an estimated Rs 28900 crore

·         Real estate, hotel assets – 7 housing colonies in the national capital and 8 ITDC hotels

·         Jawaharlal Nehru Stadium and 3 other SAI assets – The iconic Jawaharlal Nehru Stadium is also not spared. Along with another national stadium and two regional centres of Sports Authority of India at Bangalore and Zikarpur and academic institutions, the assets are expected to fetch Rs 11450 crore.

 The year wise target of monetisation is as follows:



Value of asset

to be monetised

(Rs  crore)









Gross undervaluation of infrastructural assets

One thing must be kept in mind.

 That infrastructural assets with stated worth of 6 lakh crore have been targeted for monetisation does not mean that this amount will be deposited in the government exchequer as upfront money.

As have already been stated, the assets have been extremely undervalued. This can easily be established if the capital cost of the assets are calculated at today’s price and compared with the price that has been targeted for realisation.

For instance, 22% of the National Highways aggregating 26,700 km is going to be monetised. The government announced that it would realize a sum of Rs. 1.6 lakh crore from the said asset as upfront price. But, what exactly is the capital cost involved for such a huge infrastructure? The ministry of Road Transport and Highways is on record that per-kilometre cost of developing a two-lane highway was Rs 11 - 12 crore and for a four-lane highway it was around Rs 30 crore per km till three years ago. This costing is reported to have cumulatively gone up by 30 percent. (Pioneer 18/10/2019). Taking this estimate of 2019 as the capital cost even today, the construction cost of 26,700 km of 4 lane national highways comes to not less than 8 lakh crore. It is now being decided that assets worth around Rs 8 lakh crore will be doled out to entrepreneurs of government’s choice for an upfront fee of a maximum Rs. 1.6 lakh crore. In all probability, this would further be negotiated down by the private operator government nexus. Besides, the private players will be authorised to set up any number of toll plazas etc and collect any amount as toll. The revenue sharing agreement will in all likelihood enable the concerned corporate companies to regularly bag around 70%-80% of the revenue collected, without any investment whatsoever. Thus, on the one hand national infrastructure built with people’s money is being doled out to corporates and on the other common people will be fleeced by the corporates through huge user charges and toll fees. 

Similarly, it has been decided to hand over around 50% of the existing pipeline for transporting natural gas i.e. 8154 km, for a maximum upfront fee of Rs. 24,642 crore. A former Chairman & Managing Director of Gas Authority of India Ltd (GAIL) which owns the property is on record that during August 2018, the capital cost of executing 5000 km of natural gas transmission utility was around Rs. 25,000 crore i.e Rs 5 crore per km. Considering the same price even today, the capital cost for 8154 km of pipe line comes to more than Rs 40,000 crore. The tariff for transporting natural gas is now decided by Petroleum and Natural Gas Regulatory Board. This is also going to be abolished in course of time. The government has made it clear that the corporates will have the authority to decide the service charges. There is every possibility of revision of the charges much upward once the property is doled out. It will again be the common people who will suffer, since prices of piped natural gas will increase causing hike in the end products utilising natural gas as feedstock or fuel. It is obvious that the ultimate aim of the government is winding up of the prestigious GAIL itself. At the best, the government may retain it to develop fresh Greenfield infrastructure for further doling out to corporate houses virtually free of any cost.

The same desperate burglary on the public exchequer has been planned in the case of all other infrastructural assets identified for monetisation - 400 railway stations, 90 passenger trains, 1400 km railway track, 741 km Konkan Railway, 15 railway stadiums and selected railway colonies, 265 railway goods sheds and 4 hill railways –all in lieu of Rs 1.5 lakh crore; 25 Airports fully modernised with huge investment out of public exchequer in lieu of only Rs 20,782 crore; 160 coal mining assets with huge coal reserves—all in lieu of only Rs 28,747 crore; 3930 km long petroleum pipe line—all in lieu of Rs 22503 crore; 31 projects in 9 major port with huge network of navigable waterways –all in lieu of Rs 12,828 crore; Warehouses of Food Corporation of India and Central Warehousing Corporation of total storage capacity of 210 lakh MT –all in lieu of only Rs 28,900 crore—these are few more examples of day-light robbery on the national exchequer in the name of Asset Monetisation.                                                                        Many more examples can be cited. It is not at all difficult to understand that each and every infrastructural asset that has been decided to be monetised is similarly much undervalued. But since the clear cut intention is to transfer, in disguise, practically the ownership of the assets for the monetary gains of the private entities, the BJP government obviously, does not want to lose sleep over what the exchequer would get.

 Neoliberal policy regime introduced formally from 1991 has brought with it the ugliest philosophy of loot of national productive assets by private corporates in the name of disinvestment and privatisation. Owing to consistent opposition by the working class movement disinvestment could not take off with sufficient speed during first two decades. All out privatisation was also limited to a around nine or ten PSUs.


Privatisation – Ideological commitment of the BJP


But the extreme right wing BJP regime has an animosity against self-reliant development of the national economy founded upon the huge public sector network built during the seven decades since independence. It is resorting to privatisation of the entire public sector covering infrastructure, industries and public utility services, at any cost and by any means. It is completely unconcerned about the destructive impact of its measures on the national economy and our people.


The Modi government could not attain the expected success in its project of privatisation through direct sale of PSUs to the corporates due to several factors, including the determined opposition by the united struggles of the workers. Under such circumstances, it has now decided to hand over huge infrastructural assets virtually free to the private corporate sharks in return for a paltry share of revenue to the exchequer, out of which the entire infrastructural assets were built, developed and modernised. The corporate burglars, who have not invested a single paisa in developing this huge infrastructure, will now be allowed to hold them, operate them and pocket the lion’s share of the revenue.


Cronyism is at its peak with the government corporate nexus coming into full play under the most unscrupulous so called innovation called National Monetisation Pipeline. 


Payback to the corporate donors


It is not without reason that the ruling party has captured as much as 92% of the total corporate donations in 2017-18. To interpret this in another way, corporates/businesses donated 12 times more money to the ruling BJP than to other national parties in 2017-18. [Source: Observer Research Foundation (ORF)]. It is reported in the media that if the total funding from 2014 to 2018 is taken in to account it will be found that the ruling party continued to get donation at the rate of more than Rs 10 crore a day. What did the BJP government led by Modi payback in return? Demonetisation in 2016, GST put in place in 2017 and waiver of corporate tax to the tune of Rs. 146000 crore in 2018. Though the list of contributors of the political funding is not disclosed, it is very clear that they are the same corporate/businesses who received the benefit of CPSU’s disinvestment. They are the same for whom now the door of huge infrastructural asset of the country has been opened for loot and plunder.


But the looters, plunderers and burglars cannot have the final say. The same working class movement which could build up road-blocks to desperate sale out of PSUs and have still been fighting in that direction is not going to give walk-over to this destructive onslaught on the country’s assets and people. The task before us and the working class movement in the concerned infrastructural sector in particular and also before the entire democratic movement, is to develop decisive and determined resistance to the aggressive design of National Monetisation Pipeline. 


The anti-national design of loot on national asset will not pass.

(Curtsey : CITU)

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