India plans to raise 6 trillion rupees ($81 billion) from selling state-owned infrastructure assets over the next four years.
The selling of government-owned public assets is done with an aim to strengthen the government’s finances and fill its budget deficit, according to some financial experts.
The plan will include the sale of road and railway assets, airports, power transmission lines, and gas pipelines said the people who spoke on request of anonymity as they aren’t authorized to share the details.
The planned sales are in line with Prime Minister Narendra Modi’s tricky divestment policy, under which the state will retain only a few recognized sectors with the rest privatized. The government has budgeted as much as 1.75 trillion rupees from such sales in the year through March 2022 to make up revenue due to the drop in tax revenue because of the pandemic.
Comprehensive divestment projects this year involve an initial public offering by Life Insurance Corp. of India as well as stake sales in companies such as Bharat Petroleum Corp. and Air India Ltd.
Public warehouses, civil aviation, sports stadiums, port infrastructure, and mining assets are expected to bring in another almost 1 trillion rupees it is revealed. They are also selling villages because they don’t want to give money to the Gram Panchayat, and are asking them to raise their own money, but how will the Gram Panchayat raise their own money when they don’t have the income to start with. The Center is forcing the Gram Panchayats to sell their lands.
Revenue from monetizing roads is set at 1.6 trillion rupees, while that from railways is seen at 1.5 trillion rupees, the people said. Power sector assets may fetch 1 trillion rupees, gas pipelines 590 billion rupees, and telecommunication assets 400 billion rupees, they said.
“The government does own very valuable assets and this should see investor interest,” said Sonal Varma, an economist at Nomura Holdings Inc. in Singapore. “This will be like an asset exchange, where the government sells its infrastructure assets and uses the revenue earned to invest in other infrastructure priorities that it has set.”
The monetization plan, announced by Sitharaman in her annual budget speech, will serve as a medium-term road map for the government’s asset sale initiative, state-run think tank NITI Aayog said in a statement Sunday.
The income from the asset sales is key to narrowing the nation’s budget deficit, which Sitharaman expects to be 6.8% of the gross domestic product in the financial year that began April 1, from 9.3% in the previous year. Several economists expect the country will miss that target due to economic disruptions caused by a second wave of the Covid-19 pandemic. –Bloomberg
The decision is analyzed to be ill-thought hitting millions of lives negatively removing massive work from the public sector, leading to a crisis of joblessness without generating fresh income, and one citizen remarked, “Did you know? India is the only country that will become a $5 trillion economy by selling assets worth Rs 6 trillion?” This is not the conceived natural way to build a thriving economy and no nation does this. Demonetization too, a rash decision plunged India into an economic crash. Privates cannot hire as massively as the public sector and this will lead to an economic imbalance.
The Congress party has severely admonished PM Modi for the sale of public assets and Rahul Gandhi tweeted in Hindi, the translation is as below:
“The biggest national issue is unemployment for which some direct solutions are-
Do not sell PSU-PSB
Give financial help to MSME
Think of the country, not of the friends.
But the central government does not want a solution.”
सबसे बड़ा राष्ट्रीय मुद्दा बेरोज़गारी है जिसके कुछ सीधे समाधान हैं-
PSU-PSB मत बेचो
MSME को आर्थिक मदद दो
मित्रों की नहीं, देश की सोचो।
लेकिन केंद्र सरकार समाधान करना नहीं चाहती। pic.twitter.com/frWH8hGjzM
— Rahul Gandhi (@RahulGandhi) September 3, 2021
People say that it is worrisome that the Government is not thinking of the consequences of selling assets, creating barrenness in the land with the anticipated loss of work for millions of people with an economy that will favor only the multi rich. Such steps will wipe out the poor and middle class and only happen through starvation. Presently, India is already undergoing the worst jobless crisis in 45 years.