CHENNAI: Finance Minister PTR Palanivel Thiaga Rajan said asset monetisation is a complex issue and he is not sure if grand, big-number plans designating trillions of rupees of assets and intending to raise money as part of budgeting process would work.
He was speaking during a panel discussion on asset monetisation, organised by Dravidian Professionals Forum in the backdrop of the Union government unveiling the Rs 6-lakh-crore National Monetisation Pipeline. Calling it a technical issue, the minister asked, “Is that the best way to monetise assets or are you better off going asset-by-asset or situation-by-situation, bidder-by-bidder in monetising these assets?”
“I am not sure any of these grand, big-number plans have ever worked, at least in the last six-seven years. We keep hearing about Rs 100 lakh crore of capital investment (CI). I am yet to see much of that. And there is dichotomy where you talk about Rs 100-lakh crore CI, on the other you talk about monetising assets built over the decades...,” he said, adding it is a “complex issue as we see it and there are whole number of aspects to it.”
The finance minister said the DMK government is staring at greatly-constrained balance sheet and huge debt and interest load, as a result is unable to make capital investment as it would like to do. He said the government is presently contemplating on what is public goods or services; what should only government provide; what can government provide in competition with others; what is a revenue-generating asset; and what are the areas that have no revenue directly but is just for the public good and welfare.
Answers to questions give rise to further questions, Rajan said, such as “Do we see these (assets) as products - where we buy something and operate them? Or as services permanently leased out to somebody?” Stating that the State government’s contribution towards capital investments would be not more than Rs 40,000 to Rs 45,000 crore this year, the finance minister said it is a very low per cent because of high revenue deficit.
“We are thinking much more prospectively rather than retrospectively in terms of existing assets to monetise,” he said, adding that the government is also dealing with a moral question on monetising assets built since independence under the administration and foresight of others (previous governments), even as “we (DMK) have not had a whole lot of hand in the development of such assets.”
Commenting about the retrospective monetisation, he said, “We have clearly indicated we are not very enthusiastic about it. We certainly don’t feel a great urgency or affinity for monetising things like Chennai Airport, which was on list cited by the union government. The Chief Minister has already written stating opposition to such moves.”
Restructuring of TWAD
Finance Minister PTR Palanivel Thiaga Rajan hinted that Tamil Nadu Water Supply and Drainage Board (TWAD) would be undergoing “some kind of one-time restructuring” as it presently has “a clearly unsustainable financial model based on track record from previous years.” “It has about 1,400-1,500 employees and about 9,000 pensioners.”