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Following are today’s Mains Marathon Questions.
About Mains Marathon – This is an initiative of ForumIAS to help/aid aspirants in their writing skills, which is crucial to conquering mains examination.
Every morning, we post 3 questions are based on current affairs. The questions framed are meaningful and relevant to the exam.
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Questions
1) What are the salient features of the National Monetisation Pipeline(NMP)? Highlight the key challenges that may affect the effective implementation of the NMP roadmap.
2) Explain the challenges associated with the policy of job quota for locals in the private sector. What is the rationale behind the implementation of job quota for locals in the private sector?
3) A boost to financial inclusion can accelerate India’s growth to $5 trillion quickly. Comment. Also, highlight the initiatives offered by our Government for this purpose?
What are the salient features of the National Monetisation Pipeline(NMP)? Highlight the key challenges that may affect the effective implementation of the NMP roadmap.
Asset Monetization means the transfer of the revenue rights from an asset by the Government to private parties for a specified transaction period, in return for upfront money, a revenue share, and commitment of investments in the assets. Government has launched NMP in August 2021.
The salient features of the NMP include:
– It involves leasing out assets of the Central Government valued at around Rs 6 lakh crore over a four-year period till 2025. 13 sectors have been identified for leasing which include railways, roadways, airports, shipping etc.
– NMP represents an alternative to an outright sale of assets. Under the NMP the ownership of the assets will remain with the government, and the private players will take the operational risk.
– Only underutilised assets will be monetised.
The rationale for monetization include:
– Generating revenue and reducing the fiscal deficit.
– It will help create infrastructure creation.
The challenges to the NMP include:
– Ownership of assets remains with the Government. Hence lease contracts have to be designed carefully to incentivise private investment.
– Designing appropriate regulatory framework to prevent monopolies and misuse of assets.
– Appropriate balancing of risks and profits between the Government and private entities have to be carefully designed. Government shouldn’t end up subsidising private investments. Correct valuation is necessary as undervaluation/underbidding can result in supra-normal profits for private sector.
– Issues related to maintenance of asset registers, title and encroachment may impact the implementation of the plan.
Careful redressal of the above concerns through proper design of contracts, suitable structuring of deals and appropriate regulatory arrangement can help realise the full monetization potential and benefit all stakeholders.