TOPIC – Risks and rewards

Following through on the Budget’s plan to monetize public assets in order to fund fresh capital expenditure on infrastructure, the Government has released an exhaustive list of projects and facilities to be offered to private investors over the next four years. What distinguishes it from the new public sector disinvestment policy is that a change of ownership is not envisaged. The Government estimates these assets — airports, coal mines, highway stretches, even urban tracts, stadia and hotels — to fetch around ₹5.96 lakh crore through structured leasing and securitization transactions. This, in turn, could help fund the National Infrastructure Pipeline with new projects worth ₹100lakh crore, although the Government has said fiscal constraints are not the trigger for this plan. As Finance `Minister Nirmala Sitharaman has emphasized, these assets or the land therein will not be sold but private players will be asked to pay for operation and management rights and expected to modernize assets that are either languishing or are simply under utilized. An infrastructure investment trust (InvIT) structure has already been used this year by the Power Grid Corporation to raise funds against its transmission lines network and could be used for highways, gas pipelines and railway tracks, including the Dedicated Freight Corridor. For ports, mining, railway stations, concession agreements laying out the contours for a PPP are proposed. About ₹88,000 crore is expected from the National Monetization Pipeline (NMP) in this year itself, in addition to the ₹ 1.75lakh crore already estimated in the Budget from the sale of public firms such as Air India and BPCL. While this Government is yet to complete a single PSU sale, the risks of adverse audit paras about valuations and processes hang over monetization deals too. However, post ran saction troubles in outright sales can be of a limited nature. With proposed concession periods running up t o 60 years for some assets, NMP deals, by contrast, could pose a long term headache if they are not structured with end-user interests in mind, balancing the profit and utility motives. The sharing of risk and rewards between the public and private partners needs to be weighed carefully for each sector. Checks and balances are needed for actual infrastructure usage versus projections at the time of bidding. If the Government had implemented its 2014 Budget promise to set up an apex body to devise new PPP models, learning from past mistakes, India’s institutional capacity for the NMP would have been more mature by now. Just like disinvestment deals during a downturn could crowd out new investments and risk the tag of ‘fire sales’, revenue projections for PPP assets could be deflated now leading to lower bids followed by supernormal gains for the operator in the future. Getting the nitty-gritty right is critical for this grand plan.                                                                    




  1. Exhaustive(adjective) –Performed comprehensively and completely

Synonyms – Sweeping, extensive, encyclopedic, definitive, radical

Antonyms – Superficial, pedant, ambiguous, bogus, concocted

  1. Envisaged (verb) –Contemplate or conceive of as a possibility or a desirable future event

Synonyms – Envisioned, contemplated, foresaw, envision, hallucinated

Antonyms – Concrete, existent, realistic, disregarded, actual

  1. Constraints(noun) –A device that retards something’s motion

Synonyms – Inhibitions, compulsions, shackles, dampers, strictures

Antonyms – Persuasions, incentives, allowances, liberties, scopes

  1. Trigger(verb) –Put in motion or move to act

Synonyms – Provoke, precipitate, induce, stimulate, instigate

Antonyms – Deaden, dampen, abate, consummate, abash

  1. Emphasized (verb) –Give special importance or value to in speaking or writing

Synonyms – Emphatic, accented, italicized, reiterated, emblematized

Antonyms – Amexed, softened, understated, weakened, downplayed

  1. Transmission(noun) –The act of sending a message

Synonyms – Conveyance, contagion, dissemination, diffusion, emission

Antonyms – Resist, abandon, acquisition, disregard, reception

  1. Contours(noun) –The line that bounds

Synonyms – Silhouettes, catenaries, conformation, cambers, curlicues

Antonyms – Clutter, demolish, disrupt, muddle, mess

  1. Concession(noun) –The act of conceding or yielding

Synonyms – Privilege, conceding, exemption, appeasement, bestowal

Antonyms – Repudiation, squabble, disputation, egoism, resignment

  1. Devise(noun) –A gift of real property by will

Synonyms – Contrive, invent, concoct, hatch, forge

Antonyms – Improvise, unadorned, contemplate, plagiarise, neglect

  1. Projections(noun) –A planned undertaking

Synonyms – Protrusions, bulges, bumps, ridges, salients

Antonyms – Hollow, certainty, depression, basin, cavity

  1. Deflated(adjective) –Brought low in spirit

Synonyms – Punctured, collapsed, shrunk, curtailed, dwindled

Antonyms – Distended, elated, amassed, billowing, crammed