Monetisation- a new stratagem

In India, the month of August has its own importance. In addition to the Independence Day, the month brings a series of other festivals and jamborees with it. It is also the month where businesses lure customers with lucrative offers and huge discounts to tap the festive season. One such offer in the last week of August had caught the nerves of not just the common man but renowned economists too.

Quite surprisingly, it was not from the e-commerce portals like Amazon, Flipkart and Myntra. This turn it's the union government of India that has come up with a mega sale of assets. Unfortunately, it is beyond the capacity of a common man to avail it though the offer period extends till 2025.

The union government, under the leadership of Narendra Modi, has unveiled National Monetisation Pipeline (NMP). In short, it is a roadmap that is designed to lease out the existing brownfield projects to prospective buyers for a period of 25 years. As disinvestments and privatisation are already underway in the area of Central Public Sector Enterprises (CPSEs) it seems that the union government didn't satisfy with the pace with which they are being carried out.

The union government's decision of monetising the nation's public assets is neither welcome nor appreciable. In the longer run, the oblation of golden ducks i.e. the wealth creating assets is going to be counter-productive. Though the move is not new given the path that the successive governments since the 1990s have been adopting, the recent step can be seen as a blatant display of crony capitalism.

Seemingly, the economic uncertainty that is caused by the Covid has come as a blessing to the present day union government to carry out its grandiose plan of gifting the national assets to its cronies under the mask of correcting measures.

It is no rocket science to know how an asset is created. An asset doesn't fall from the sky or heaven. It has to be made. The building up of an asset requires raw materials, labour and wherewithal. In case of assets that are made in the interest of public, it requires humongous exercise of deliberations to decide what would be the best fit for the nation or community as a whole in the long term. These assets are made upon the optimal utilization of resources.

Though the tag or title of ownership on the assets that are created out of public finances rests in the hands of government or state or any other political authority in order to avoid the individual claims, the real ownership rests upon the community or the citizens of country. Every individual in a country has his/her direct or indirect share in the realization of assets.

While some contribute directly in the creation of asset by taking part in the labour others will contribute their efforts by paying taxes or duties to the government. Apart from the right, every individual will have a sense of belonging with it. Public assets or enterprises are the ones which every individual of the respective nation look up to and feels proud of. These are the assets that cannot be seen from the monetary lens.

The political leadership has the duty to safeguard or development or the establishment of the new assets. It cannot act according to its whims and fancies. In contrast to the role of guardian of public assets what it is obligated with, the present leadership in the country has been acting like a salesman. It appears that the current regime is trying to white wash its mismanagements during the Covid times by announcing extravagant give aways or take aways to the private players or foreign entities under the guise of reviving the economy.

Though it has been trying to wrap its wrong-doings under the carpet in the economical fold, the dire state of economic health of nation can be noticed easily. At a time when the role of State in economic domain has to be maximised to heal the wounds that are caused by the pandemic the union government has been doing the other way around.

The BJP-led union government, which is known for delivering jubilant slogans and eye-catchy acronyms but devoid of substance, has mismanaged the country's economy in the pre-Covid, during the Covid and post-Covid times for its political gains. Be it demonetisation or GST, the union government has been habituated to making unpredicted moves making the economical scene unpredictable. On the one hand, tactically, it boasts itself as a flag bearer of self-reliance to complement its political agenda and on the other it withdraws itself from not just the key sectors but as a whole to cajole its crony friends.

Does the State lack managerial experts or bureaucrats to improve the performance of the assets in question? It is no-brainer to say a big no. Is there any guarantee that the leasing out program will not replace state monopoly with private monopoly? Going by the present business scene in the country there is no need to burn midnight oil to guess.

What will the government do with the money that it gets from leasing out the assets? Will it spend on the development of infrastructure. If so, what sort of infrastructure? In fact, the government is looking forward to monetise the existing infrastructure and wants to build the new ones. Will it consider the depreciation cost of an asset due to wear and tear during the leasing out period and shift it onto the private operators? Does it guarantee that the services would not cost an arm and a leg for a common man down the line? Does it lack the resources to improve the quality and performance of the asset? Does it lack manpower to operate by herself? Can we expect transparency in revenue during the operating period by the private players?

Will the government make sure that the leasing period cannot be extended even if the private players book low revenues? Has the government shed a thought on the question of demand given the scenario of under utilisation of existing infrastructure? Will the government make sure that the livelihood and other social securities of current work force employed in those projects are not done away with? Will the private players retain them down the line? These are the questions that the union government has to answer itself before making any major move.

The leadership has been trying to support its argument by highlighting the buzz words like efficiency and profitability. Is it right to expect profits from an asset or good that is built to meet the needs of citizens. It is beyond rationality by any means to expect profits from the entities that

are designed and build keeping the national interest in perspective. Moreover, infrastructure projects especially the ones like railways or roads that serve the needs of a common man cannot be seen as gold diggers.

It is preposterous to assume that the private players will be keen on investing or upgrading the assets they are bestowed with. Without any doubt, the sole motive of them will be making money more than what they have invested in the bidding process. This tendency would compromise the quality of assets.

(The author is Director, Samudrala VK IAS Academy)