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In a bid to push the national infrastructure pipeline (NIP), India contemplates an investment of INR 111 lakh crore over a period of five years (i.e., FY 2020 – 2025). To achieve this target, the Government of India (GoI) is tapping alternate ways which includes ways for alternate financing. 
For attracting investments in the infrastructure sector and putting the investments planned under the NIP on track, GoI made provisions in the Union budget for FY 2021 -2022. The budget reflected a three branched strategy, i.e., (a) creating institutional structures; (b) pushing up asset monetization; and (c) enhancing share of capital expenditure in central and state budgets. 
For attracting investments in the infrastructure sector and putting the investments planned under the NIP on track, GoI made provisions in the Union budget for FY 2021 -2022. The budget reflected a three branched strategy, i.e., (a) creating institutional structures; (b) pushing up asset monetization; and (c) enhancing share of capital expenditure in central and state budgets. 
The core brownfield infrastructure assets identified for monetisation under the NMP include roads, ports, airports, telecom, railways, warehousing, energy pipelines, power generation, power transmission, urban infrastructure, and sports stadiums. Monetisation of non-core assets such as land and building and monetisation through disinvestment have been specifically omitted from the NMP.
Below are some of the key reforms/initiatives undertaken by the GoI to facilitate monetisation of the identified assets across different sectors in line with the NMP and encourage investments by the private sector entities by inter alia relaxing several processes/restrictions and boosting investors’ confidence: 
It is also pertinent to note that the equity lock-in period provided in the standard bidding documents for selection of a transmission service provider has been reduced to 51% percent of the share capital of concerned SPV up to a period of one year after the commercial operation date of project, as opposed to the earlier requirement of (a) 51% up to a period of two years after the commercial operation date of project; and (b) 26% for a period of three years thereafter. Such an amendment is a welcome move for investors looking for short term equity investment with greater flexibility and provision for an earlier exit. 
For easing out obstacles in the transmission business, the Ministry of Environment, Forest and Climate Change removed the mandatory pre-requisite of obtaining a no-objection certificate, at the field level, from various landowning agencies regarding laying of transmission lines in the forest areas, whose land fell in the alignment of the proposed project, through its circular dated 1 January 2020. 
Additionally, to uplift growth in the sector, GoI, recently circulated the Indian Ports Bill, 2021. The bill provides a definitive regulatory blueprint for creation of new ports and better management of the existing ones. It also provides for formulation of national plan for development of existing and/or new major and non-major ports in the country.
Way Forward for NMP 
The implementation of NMP will have to be supported through continuous regulatory interventions by the GoI which will have to roll out policies as and when required to jump across any obstacles which occur in such implementation. In addition, for effective execution of the NMP, innovative models and extensive private sector collaborations will have to be undertaken. GoI will also have to ensure ease of doing business for this purpose. In short, the NMP will: (a) serve as a roadmap for various ministries and government agencies to develop the relevant infrastructure; (b) provide visibility to the investors on the assets which are being considered for monetisation and for which the GoI will aid in development; (c) provide ministries with a platform to track asset performance; and (d) enhance the efficiency of public assets. The budget for FY 2022-23 also advances the objective of NMP, boosting investor confidence, by inter alia (a) increasing the outlay of capital expenditure to 35.4% for FY 2022-23; and (b) introducing PPP model in wider range of sectors, thereby crowding in private investments. 

The content of this document does not necessarily reflect the views / position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at [email protected].
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