National Monetisation Pipeline will help India move towards a project finance economy: Cyril Shroff

The Centre's National Monetisation Pipeline (NMP) worth Rs 6 lakh crore focuses on five major sectors to privatise viable assets and attract investor attention.

On August 23, union finance minister Nirmala Sitharaman announced the plan that will look to unlock value in infrastructure assets across sectors ranging from power to road and railways. She added that asset monetisation does not involve selling land and it is about monetising brownfield assets.

In an interview with CNBC-TV18, Cyril Shroff, managing partner at Cyril Amarchand Mangaldas said with NMP, India is moving away from a working capital economy to a project finance economy. He added other initiatives like Gati Shakti, DFI etc that has been set up, all will move together to achieve the same goal.

"NMP is a paradigm shift but apart from this initiative, there are a number of other initiatives like Gati Shakti, the new DFI that has been set up, all of these will move together to achieve the same goal. So we are effectively moving away from a working capital economy to a project finance economy. What the NMP does is it takes out the development risk because the government is good at building assets but when it comes to operations and maintenance the private sector is better. So this is project finance with an important twist and we are going to see unleashing of a lot of growth."

Amitabh Kant, CEO of Niti Aayog said the objective of NMP is to use innovative mechanisms, state of art technologies in operating, maintaining and augmenting assets that are sustainable and resilient. He said NMP will have a very huge positive impact on the overall economy.

"Infrastructure lies at the heart of India's sustained economic growth and policies like NMP are focused on bringing a paradigm shift in the way it is funded and managed in the country. The objective of NMP is to use innovative mechanisms, state of art technologies in operating, maintaining and augmenting assets that are sustainable and resilient. So in essence, it is about bringing in a better qualified private sector to operate and maintain assets that have been built by the government. The Centre is good at building assets but it is extremely poor at operation and maintenance. So NMP will have a very huge positive impact on the overall economy."