Consider the following statements : 1. National Monetisation Pipeline estimates that for the period 2022-2025, the top three sectors in terms of monetization potential are roads, railways, and oil and gas pipelines 2. Under the National Monetisation Pipeline, the instruments to be used for asset monetization include Public-Private Partnership concessions and Infrastructure Investment Trusts Which of the statements given above is/are correct?
- (a)1 only
- (b)2 only
- (c)Both 1 and 2
- (d)Neither 1 nor 2
Correct — B, 2 only. Statement 2 is right. The pipeline works through two families of instruments — direct contractual approaches such as public-private partnership concessions, leases and operate-maintain-transfer arrangements, and structured financing vehicles such as infrastructure investment trusts and real estate investment trusts, which package operating assets into units that institutional investors can buy. Statement 1 fails on the third sector. Roads lead the pipeline at roughly a quarter of its value and railways come next at roughly another quarter, but the third place belongs to power, whose transmission and generation assets together far exceed the natural gas and petroleum product pipelines. Oil and gas pipelines are in the pipeline, and sizeable, but they are not the third largest sector in it.
- (a)1 only — It accepts the sector ranking and rejects the instruments, both wrongly. Public-private partnership concessions and infrastructure investment trusts are the two headline instruments named in the pipeline document.
- (c)Both 1 and 2 — It carries the sector error. After roads and railways the largest block is power, not oil and gas pipelines.
- (d)Neither 1 nor 2 — Statement 2 is a plain description of how the monetisation is to be done, so rejecting both statements cannot be right.
Asset monetisation raises money from infrastructure that already exists and is already earning, by transferring the right to operate it for a fixed period while ownership stays with the government. The asset returns at the end of the concession. The National Monetisation Pipeline, announced in August 2021, put an indicative value of about six lakh crore rupees on core central government assets over four years to 2024-25, and it deliberately covers only brownfield assets with a stable revenue stream.
The two statements are of different kinds, and that is the clue. Statement 2 describes the machinery, which is stable and documented. Statement 1 makes a ranking claim, which requires the sector table. The safe route is to accept the machinery, then test the ranking on what is easiest to recall — that roads and railways dominate the pipeline together, and that power is the next block. Any statement that promotes a smaller sector into third place should be treated with suspicion.
- The National Monetisation Pipeline was announced in August 2021 and covers the four years to 2024-25.
- Its indicative value is about six lakh crore rupees of core central government assets.
- Roads account for roughly 27 per cent of the pipeline and railways for roughly 25 per cent.
- Instruments include public-private partnership concessions and infrastructure investment trusts.
- Only brownfield assets with an established revenue stream are covered; ownership stays with the government.
Statement 1 promotes the fourth row into third place, which is where it fails.
- Confusing the National Monetisation Pipeline, which raises money from existing assets, with the National Infrastructure Pipeline, which lists new projects.
- Believing that monetisation transfers ownership; it transfers the right to operate for a period.
- Ranking a sector by how often it appears in the news rather than by its share of the pipeline.
A two-statement item that pairs a stable description of instruments with a ranking claim, so the ranking is where the error is planted.
The Global Infrastructure Facility is a/an
- (a) ASEAN initiative to upgrade infrastructure in Asia and financed by credit from the Asian Development Bank.
- (b) World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of private sector and institutional investor capital.
- (c) Collaboration among the major banks of the world working with the OECD and focused on expanding the set of infrastructure projects that have the potential to mobilize private investment.
- (d) UNCTAD funded initiative that seeks to finance and facilitate infrastructure development in the world.
Answer(b) World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of private sector and institutional investor capital.
The same instrument seen from the international side. Structuring public-private partnership concessions so that institutional capital can be drawn into infrastructure is precisely what statement 2 here describes.
- practice — not a real PYQ
Under the National Monetisation Pipeline, ownership of a monetised asset
- (a)Passes permanently to the private operator
- (b)Remains with the government, with the asset returning after the concession period
- (c)Passes to a state government
- (d)Is transferred to a foreign investor
Answer(b) Remains with the government — only the right to operate is transferred, for a fixed period.
- practice — not a real PYQ
Which sector accounts for the largest share of the National Monetisation Pipeline?
- (a)Railways
- (b)Roads
- (c)Telecom
- (d)Ports
Answer(b) Roads — about 27 per cent of the indicative value, with railways next.