I would agree with the principle of asset monetisation. However, I can't understand why the Govt. is eager in selling its moneymaking assets. Ex - Vizag Steel. There has been a great hue and cry in Andhra Pradesh over its privitisation. But as usual, being far away from Delhi, no one really cares. If it was a loss making entity, its okay to part with. But, why 100% privitisation, when one can make it public in the stockmarket.
There should also be some sort of regulations to prevent monopolies. I'll not take the name, but the company is on a buying spree of Indian ports. It now controls majority of the private ports.
There should be a fair monetisation policy. Assets should realise their true value.
As you said, peoples memory is short. The govt shouldn't take it for granted. There have been signs of crony capitalism over the past few years. It is for the govt to allay these fears.
Thank you for your response Vivek. You have posed a very interesting question. Indeed in successful ventures may be they could try out an asset monetisation model--wherein a private entity is roped in to run and maintain the project for a fee; it will save administrative costs to the government.
On the issue of monopolies, you are spot on. It is inimical to public interest. But if you look at the India story it is mostly a case of duopolies in most sectors. While the CCI is scrutinising such trends I do believe that to some extent we do need to leave it to the market to decide. Public policy interventions open the door for corruption, project delays, bad debts and so on. Thank you for writing in. Best. Anil
very well analysed article on asset monetization.(AM)..Unlike privatization no sale of govt assets is involved, the assets return to the govt after the end of the lease period. Through AM govt can earn revenue to build more infrastructure. There is efficient utilization of the under utilized govt assets by the private sector, generates employment and income.
But there are many challenges and precautions. If not properly executed NMP will face the same fate as Make in India, Aatamnirbhar bharat etc. The govt needs a team of seasoned technocrats who are experts in making intellectual framework of agreements, quick in taking decisions and be ready with their strategies to combat any eventualities. Also the govt should not use the money raised through monetization to cover its fiscal deficit, but for more gross domestic capital formation.
Dear Vandana, Thank you for your response. Agree with you entirely that implementation is the key. For this our national mindset also needs a reset; and this can only happen gradually. The Delhi Metro showed us how we can create pockets of excellence. Trick is to scale this.
On your point about the use of funds, the Asset Monetisation Plan actually makes it clear that the money so generated will be used for financing more infra projects. So that part of the problem is resolved (on paper). Thank you again for writing in. Best. Anil
Finally the reality has been accepted that our public sector requires management by the private sector. On their own, due to work ethics, they cannot be cost effective. However, this changeover will come at a cost. The profits will flow into few hands and the personnel doing the job more efficiently, will actually cost the employer less. This will have an impact on the economy, as the purchasing power of many will be reduced to fewer hands. But this bitter pill will have to be taken. Perhaps there will be light at the end of the tunnel.
Thank you Gautam. Though I think all the PSUs are not alike. This problem us acute in a B2C environment. The case of Isro is a good example. And India Inc has its own limitations. Guess this us an iterative exercise which will eventually uncover a favorable new normal. Thank you again.
Excellent
Wonderful
Thank you Balesh
I would agree with the principle of asset monetisation. However, I can't understand why the Govt. is eager in selling its moneymaking assets. Ex - Vizag Steel. There has been a great hue and cry in Andhra Pradesh over its privitisation. But as usual, being far away from Delhi, no one really cares. If it was a loss making entity, its okay to part with. But, why 100% privitisation, when one can make it public in the stockmarket.
There should also be some sort of regulations to prevent monopolies. I'll not take the name, but the company is on a buying spree of Indian ports. It now controls majority of the private ports.
There should be a fair monetisation policy. Assets should realise their true value.
As you said, peoples memory is short. The govt shouldn't take it for granted. There have been signs of crony capitalism over the past few years. It is for the govt to allay these fears.
Thank you for your response Vivek. You have posed a very interesting question. Indeed in successful ventures may be they could try out an asset monetisation model--wherein a private entity is roped in to run and maintain the project for a fee; it will save administrative costs to the government.
On the issue of monopolies, you are spot on. It is inimical to public interest. But if you look at the India story it is mostly a case of duopolies in most sectors. While the CCI is scrutinising such trends I do believe that to some extent we do need to leave it to the market to decide. Public policy interventions open the door for corruption, project delays, bad debts and so on. Thank you for writing in. Best. Anil
Dear Anil,
very well analysed article on asset monetization.(AM)..Unlike privatization no sale of govt assets is involved, the assets return to the govt after the end of the lease period. Through AM govt can earn revenue to build more infrastructure. There is efficient utilization of the under utilized govt assets by the private sector, generates employment and income.
But there are many challenges and precautions. If not properly executed NMP will face the same fate as Make in India, Aatamnirbhar bharat etc. The govt needs a team of seasoned technocrats who are experts in making intellectual framework of agreements, quick in taking decisions and be ready with their strategies to combat any eventualities. Also the govt should not use the money raised through monetization to cover its fiscal deficit, but for more gross domestic capital formation.
Dear Vandana, Thank you for your response. Agree with you entirely that implementation is the key. For this our national mindset also needs a reset; and this can only happen gradually. The Delhi Metro showed us how we can create pockets of excellence. Trick is to scale this.
On your point about the use of funds, the Asset Monetisation Plan actually makes it clear that the money so generated will be used for financing more infra projects. So that part of the problem is resolved (on paper). Thank you again for writing in. Best. Anil
Finally the reality has been accepted that our public sector requires management by the private sector. On their own, due to work ethics, they cannot be cost effective. However, this changeover will come at a cost. The profits will flow into few hands and the personnel doing the job more efficiently, will actually cost the employer less. This will have an impact on the economy, as the purchasing power of many will be reduced to fewer hands. But this bitter pill will have to be taken. Perhaps there will be light at the end of the tunnel.
Thank you Gautam. Though I think all the PSUs are not alike. This problem us acute in a B2C environment. The case of Isro is a good example. And India Inc has its own limitations. Guess this us an iterative exercise which will eventually uncover a favorable new normal. Thank you again.
Well said .
Thank you Shreekant