Big push likely for PSU asset monetisation in Budget

New Delhi: Governments asset monetisation programme involving development and sale of surplus land parcel and other non-core assets of public sector enterprises (PSEs) is expected to be big focus of Budget 2019-20 that is constrained to look at various innovative models to mobilise additional resources amidst a slowing economy.

Senior government officials said that the new asset monetisation programme will hinge on a two-pronged strategy. One involving strategic sale of loss making and defunct PSEs sitting on large tracts of land that could be commercially utilised.

The second part of the strategy will be to get even existing profit making PSEs such as ONGC, NTPC, SAIL, BHEL, Airports Authority of India (AAI), PowerGrid, to sell some of their non-core assets, including manufacturing units and surplus land to realise funds that could be invested in new projects where private investments is not forthcoming.

The government will benefit from such exercise as portion of gains from such sale by PSUs will be recouped to it by way of higher dividend pay-out.

Also, it will receive a portion of the commission charged by state-run construction company NBCC Ltd that may get mandate to auction some of the PSU assets.

DIPAM has also sought Expression of Interests (EoI) from international property consultancy firms to offer advisory services in its CPSE land and building asset monetisation drive.

"There are huge tracts of land in prime areas that could realise good commercial value on sale. Some of the land parcels are with loss making and defunct PSEs that could offer good revenue to the government under the strategic sale route.

A portion of this land can also be used for making affordable housing for poor," said a government official asking not to be named.

"Though the asset monetisation scheme was announced in 2016, it never took off due to differences over the scale and end use of such assets.

Moreover, the earlier plan weighted heavily on involving NBCC to facilitate quick monetisation of assets. But this was not the right path to take," the official added.

The renewed focus on asset monetisation this year will active participation of both NBCC and international property consultants and other consultants selected through a competitive bidding process.