Letter from the Editor-in-Chief
The Prime Minister Mr. Narendra Modi has earlier set a target of 5 trillion dollar economy of India, which is now only at 2.9 trillion dollar. This target was necessary as poverty in India cannot be eliminated unless economic development takes a fast track. For example, in Japan which has only 126 million people as compared to India, which has 1370 million people has an economy of 5.1 trillion dollar. The China has 14.3 trillion dollar economy. In such circumstances, the Government needs to think outside the box.
In India, there are many public sector institutions like Air India etc which are eating the resources of the country and contributing nothing to the economy of the country. The earlier concept of the privatization of these public sector undertaking has few takers. Realizing this, the Government has started a well intended National Monetisation Pipepline. The objective is to enable infrastructure creation through ‘Monetisation’. This is something like public and private sector collaboration and each sector use their competence for the socio economy growth with the sole objective of improving the quality of the life citizen of the nation. Our Cover story this month is ‘Will the Govt succeed with NMP’, which gives an insight on the subject. The idea of NMP is full of merit. Post covid, it is important that the Government invest in infrastructure which holds the key of development. It is to be noted that the share of capital expenditure of the Government in pre-pandemic year, that is financial year 2019 was only 12.3%. This has been budgeted to 15.91% for the financial year 2022. It is here that the government intends to raise funds. The difference this time is that the Government will retain ownership of such assets and private partners will be allowed to run the institution/unit to the best of the competence. Professor Tulsi Jayakumar of Bangalore has rightly said and I quote ‘The asset monetization envisaged seeks to move away from an earlier focus on Greenfield investments-which have seen little private sector appetite in the past- towards brownfield investments. The Public-Private partnership envisaged in such brownfield investments would benefit from the efficiencies brought in by the private sector’.
However well may be the intention, there is no guarantee that the target set by the government will be achieved. Past experience shows that the Government has failed year by year in meeting their targets of resource mobilization through privatization. There is a need for a clear-cut thinking for the issue that concern monetization. For example, Government is collecting tax through toll booths which is often termed as most successful methods of monetisation. However, this toll collection has also witnessed protests in different parts of the country and also encouraged illegal toll tax collection by NGOs and unemployed youths. The Government must clearly define the method of implementation of NMP. The issue of conceptual and operational clarity must be defined. A roadmap of implementation with scenario planning in place must be made ready which does not seem to be the part of document that Government has released.
Dr K.K Jhunjhunwala