{"id":166581,"date":"2022-02-04T20:54:50","date_gmt":"2022-02-04T15:24:50","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=166581"},"modified":"2022-02-04T20:54:50","modified_gmt":"2022-02-04T15:24:50","slug":"answered-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","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-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\/","title":{"rendered":"[Answered] 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."},"content":{"rendered":"<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\"><b><span data-contrast=\"auto\">Introduction<\/span><\/b><span data-contrast=\"auto\">: Briefly explain the National Monetisation Pipeline.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\"><br \/>\n<\/span><b><span data-contrast=\"auto\">Body:<\/span><\/b><span data-contrast=\"auto\"> Explain the salient features and benefits of NMP. Write the challenges associated with implementation of NMP.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\"><br \/>\n<\/span><b><span data-contrast=\"auto\">Conclusion:<\/span><\/b><span data-contrast=\"auto\"> Briefly provide a way forward.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:259}\">\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-contrast=\"none\">National Monetisation Pipeline (NMP), announced in budget 2021, is an <\/span><b><span data-contrast=\"none\">asset monetisation programme. Program<\/span><\/b><span data-contrast=\"none\"> envisages to <\/span><b><span data-contrast=\"none\">raise Rs 6 lakh crore<\/span><\/b><span data-contrast=\"none\"> by leasing out government owned infrastructure in over 4 years from 2022 to 2025.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Salient features and benefits of the National Monetisation Pipeline (NMP):<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li><span data-contrast=\"none\">It aims to <\/span><b><span data-contrast=\"none\">unlock the value of underutilized brownfield government projects<\/span><\/b><span data-contrast=\"none\"> by private sector participation. It would <\/span><b><span data-contrast=\"none\">increase the efficiency of assets<\/span><\/b><span data-contrast=\"none\"> by ensuring optimum utilisation. It will also <\/span><b><span data-contrast=\"none\">promote greater Public-Private Partnership<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">It seeks to transfer <\/span><b><span data-contrast=\"none\">only the revenue rights<\/span><\/b><span data-contrast=\"none\">, while ownership rights remain with the government. Since<\/span><b><span data-contrast=\"none\"> only revenue rights are transferred, NMP will face lesser resistance<\/span><\/b><span data-contrast=\"none\"> as compared to disinvestment.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">It provides for <\/span><b><span data-contrast=\"none\">structured partnerships<\/span><\/b><span data-contrast=\"none\"> with defined contractual frameworks and competitive bidding where participants will have to share to Key Performance Indicators. It provides <\/span><b><span data-contrast=\"none\">structure to the government\u2019s efforts to monetize assets<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Rail, roads and power sector will comprise over 66%<\/span><\/b><span data-contrast=\"none\"> of the total value generated under NMP.\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><b><span data-contrast=\"none\">States are incentivized by the Union government<\/span><\/b><span data-contrast=\"none\"> to pursue monetisation of their assets. It will <\/span><b><span data-contrast=\"none\">foster cooperative federalism<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">The revenue generated from NMP will be utilised for the creation of greenfield projects. It <\/span><b><span data-contrast=\"none\">reduces pressure on government resources<\/span><\/b><span data-contrast=\"none\"> by providing revenue for capital expenditure.The NMP is <\/span><b><span data-contrast=\"none\">co-terminus with National Infrastructure Pipeline<\/span><\/b><span data-contrast=\"none\"> launched in 2019.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">An <\/span><b><span data-contrast=\"none\">empowered committee headed by a cabinet secretary<\/span><\/b><span data-contrast=\"none\"> will oversee the implementation of the programme.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"none\">Real time monitoring<\/span><\/b><span data-contrast=\"none\"> will be possible through the asset monetisation dashboard.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">However, there are some challenges that need to be addressed to achieve the desired outcome of the programme.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li><b><span data-contrast=\"none\">Lack of identifiable value streams <\/span><\/b><span data-contrast=\"none\">in various assets may discourage the private sector.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">Since ownership is not transferred, infrastructure projects <\/span><b><span data-contrast=\"none\">may not be attractive for the private sector<\/span><\/b><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"none\">Lack of dispute resolution mechanism<\/span><\/b><span data-contrast=\"none\"> will lead to loss of time and resources in case of conflict.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"none\">Risk of creation of monopolies<\/span><\/b><span data-contrast=\"none\"> where a few firms capture most of the assets.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><span data-contrast=\"none\">The issue of<\/span><b><span data-contrast=\"none\"> balancing social benefit and private profit<\/span><\/b><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"none\">Lack of independent regulator<\/span><\/b><span data-contrast=\"none\"> will hamper smooth functioning.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"none\">Government red tape and complex procedures<\/span><\/b><span data-contrast=\"none\"> may slowdown the process.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li><b><span data-contrast=\"none\">Sector specific challenges<\/span><\/b><span data-contrast=\"none\"> like regulated power tariffs, low-capacity utilization in gas and oil pipelines, low investor interest in national highways less than four lanes will create difficulty in their monetisation.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">National Monetisation Pipeline presents a good alternative to the disinvestment or privatisation for resources mobilisation. The success of NMP will require good execution of the programme, along with addressing issues like creation of independent regulator and dispute resolution mechanism.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction: Briefly explain the National Monetisation Pipeline. Body: Explain the salient features and benefits of NMP. Write the challenges associated with implementation of NMP. Conclusion: Briefly provide a way forward.\u00a0 National Monetisation Pipeline (NMP), announced in budget 2021, is an asset monetisation programme. Program envisages to raise Rs 6 lakh crore by leasing out government&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/answered-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\/\">Continue reading <span class=\"screen-reader-text\">[Answered] 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.<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-166581","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/166581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=166581"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/166581\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=166581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}