{"id":129778,"date":"2021-08-30T20:30:23","date_gmt":"2021-08-30T15:00:23","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=129778"},"modified":"2021-09-01T18:04:32","modified_gmt":"2021-09-01T12:34:32","slug":"it-makes-sense-to-extract-value-from-underutilized-public-assets-on-asset-monetisation","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/it-makes-sense-to-extract-value-from-underutilized-public-assets-on-asset-monetisation\/","title":{"rendered":"It makes sense to extract value from underutilized public assets (On Asset monetisation)"},"content":{"rendered":"<p><strong>Source<\/strong>: <span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/epaper.livemint.com\/Home\/ShareArticle?OrgId=30873e90837&amp;imageview=0\">Live Mint<\/a><\/span><\/p>\n<p><strong>Relevance:<\/strong> Resource Mobilisation<\/p>\n<p><strong>Synopsis:<\/strong> National Monetisation Pipeline (NMP), should be welcomed.<\/p>\n<h5><strong>Background<\/strong><\/h5>\n<ul>\n<li><strong>Read here<\/strong>: <a href=\"https:\/\/forumias.com\/blog\/national-monetization-pipeline-explained-pointwise\/\" target=\"_blank\" rel=\"noopener\">National Monetisation Pipeline Project \u2013 Explained, pointwise<\/a><\/li>\n<\/ul>\n<h5><strong>The Rationale behind Asset Monetisation<\/strong><\/h5>\n<ul>\n<li><strong>Additional Fiscal resources for states:<\/strong> Public assets like roadside parking slots, municipal grounds and advertising surfaces and parade grounds of police and defence services remain unused for the most part of the year. Revenue-starved governments across the country could find new resources to finance higher demands on public expenditure.\n<ul>\n<li>For instance, imposing parking charges on a mere 1.5% of Bengaluru city roads could add 5% to its annual budget<\/li>\n<\/ul>\n<\/li>\n<li><strong>Improved Governance and Public services: <\/strong>Corruption and inefficiency are often blamed for the poor state of public services like policing, health, education, transport and so on<strong>. <\/strong>However<strong>,<\/strong> cash-strapped governments are the single biggest reason for the poor public delivery of services. With increase in public finances, governance and public services will improve substantially.<\/li>\n<\/ul>\n<h5><strong>Suggestions\/measures<\/strong><\/h5>\n<ul>\n<li>To control corruption and cronyism <em>(giving undue favors to friends and associates)<\/em>, <strong>policy design should be corruption-resistant<\/strong>, insist on transparency, promote market competition and punish wrong-doers<strong>.<\/strong><\/li>\n<li>NMP implementation should allocate assets in a way that the lessee has a <strong>natural incentive to maintain public assets.<\/strong><\/li>\n<li><strong>Recommendations by NITI Aayog<\/strong>: NITI Aayog has made the following recommendations to make NMP a success,\n<ul>\n<li>First, the government should give <strong>i<\/strong><strong style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\">ncome tax breaks to attract retail investors<\/strong><span style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\"> into instruments such as Infrastructure Investment Trusts (InvITs). <\/span>More <strong style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\">tax-efficient and user-friendly mechanisms<\/strong><span style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\"> like allowing tax benefits in InvITs as eligible security to invest under Section 54EC of the Income Tax Act, 1961, are important for <\/span><strong style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\">initiating retail participation<\/strong><span style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\"> in the instruments.<\/span><\/li>\n<li>Second, it also suggested bringing in<strong style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\">\u00a0policy and regulatory changes<\/strong><span style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\"> to scale up monetisation instruments such as InvITs and Real Estate Investment Trusts (REITs). <\/span>Section 54EC allows taxpayers to <strong style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\">offset long-term capital gains<\/strong><span style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\"> from transactions in immovable properties through investments in bonds issued by some government-backed infrastructure firms.<\/span><\/li>\n<li>Third, it suggested expanding the investor base, which is a critical element for the NMP.<\/li>\n<li>Fourth, it also called for bringing such trusts <strong style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\">within the ambit of the Insolvency and Bankruptcy Code (IBC)<\/strong><span style=\"font-family: var(--list--font-family); background-color: var(--global--color-background); color: var(--global--color-primary); font-size: var(--global--font-size-base);\"> to provide greater comfort to investors.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source: Live Mint Relevance: Resource Mobilisation Synopsis: National Monetisation Pipeline (NMP), should be welcomed. Background Read here: National Monetisation Pipeline Project \u2013 Explained, pointwise The Rationale behind Asset Monetisation Additional Fiscal resources for states: Public assets like roadside parking slots, municipal grounds and advertising surfaces and parade grounds of police and defence services remain unused&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/it-makes-sense-to-extract-value-from-underutilized-public-assets-on-asset-monetisation\/\">Continue reading <span class=\"screen-reader-text\">It makes sense to extract value from underutilized public assets (On Asset monetisation)<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8671,8942,8782,216,9277],"class_list":["post-129778","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-changes-in-industrial-policy","tag-fiscal-policies","tag-government-policies-and-interventions","tag-gs-paper-3","tag-national-monetisation-pipeline","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704784315},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/129778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=129778"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/129778\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=129778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=129778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=129778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}