1. Which sectors fuelled exports growth so far in FY22?

Relevant for GS Prelims & Mains Paper III; Economics

Merchandise exports hit $33.14 billion in August, up 45.2 per cent year- on-year, backed by strong international demand, according to data released by the Commerce Ministry.

Last month added to a strong export performance in the first four months of this fiscal, which has seen exports rise by about two-thirds to $163.7 billion compared to April-August FY21 and about 23 per cent higher than April-August FY20 which was not hit by the pandemic. The government is targeting merchandise exports of $400 billion for FY22.

Imports too saw an increase, up 51.1 per cent year-on-year in August to $47 billion, raising the trade deficit for this fiscal thus far to $55.9 billion up from $22.7 billion a year ago.

What are the key causes behind rising exports?

The key drivers behind growth in exports have been higher shipments of engineering goods, petroleum products, gems and jewellery and textiles and garments.

A sharp rise in demand from the US, UAE and China have led to an increase in demand for engineering goods this fiscal, according to the Engineering Exports Promotion Council. Engineering goods exports rose 58.8 per cent over that in August 2020.

Petroleum product exports rose 139.8 per cent, bolstered both by a recovery in demand for mobility and a sharp uptick in the price of crude oil and petroleum products compared to the year ago period. Exports of gems and jewellery rose 88 per cent on the back of renewed demand compared to the year-ago period.

How is India’s export performance compared to the pre-pandemic period?

While total exports during the first five months have risen by 23 per cent compared to April-August in FY20, non-oil and non-jewellery exports have risen by only 3.3 per cent, indicating that higher crude oil prices and a recovery in demand for gems and jewellery have played a significant role in pushing up the overall value of exports.

What is driving higher imports and the trade deficit?

Significant increases in gold imports have been the key driver in the higher merchandise trade deficit.

“Gold imports surged further to a five month high of $6.7 in August 2021, and were responsible for 88 per cent of the rise in the merchandise trade deficit relative to July 2021,” said Aditi Nayar, chief economist, Icra Ratings.

Gold imports rose by 82.2 per cent in August compared to the year-ago period.

The import of crude oil and petroleum products remained stable relative to July 2021, but were up 80.4 per cent from the year-ago period on the back of a significant increase in crude oil prices and improved demand for petroleum products.

Source: The Indian Express

2. Why are ‘breakthrough’ infections a concern?

Relevant for GS Prelims & Mains Paper III; Science & Technology

India’s second wave has not fully dipped and over the past seven days, daily infections of COVID-19 have logged over 40,000 cases. The rise in daily infections is primarily seen in Kerala and Maharashtra, which paradoxically are also among the States which have a high rate of vaccination. In this context, there are concerns about the rise in ‘breakthrough infections’ or confirmed infections in those who have got the second dose of the vaccine at least two weeks earlier.

Are those who are doubly vaccinated getting COVID-19?

If a person gets infected with the SARS-CoV-2 virus 14 days after the second shot of the vaccine, it is called a ‘breakthrough infection’. The two-week window is the time it takes for the body to produce necessary antibodies following a shot of the vaccine. A ‘breakthrough infection’ refers to the virus being able to penetrate the protective barrier of antibodies. There are no official estimates, nationally, of how many ‘breakthrough infections’ have been reported in India but news reports in mid-August, quoting unnamed officials, estimated that 80,000-100,000 people got infected, nearly half in Kerala. The State has a COVID-19 genome surveillance programme that periodically monitors the prominent coronavirus variants as well as whether some variants are more closely linked to instances of ‘breakthrough infections’. According to the latest update on August 30, 7,202 coronavirus samples, or about 0.1% of its cumulative caseload of 400,000 confirmed cases, had been sequenced. A subset of those who tested positive in April, May and June had ‘breakthrough infections’. The total number is not known yet, but 155 such breakthroughs were analysed, 147 of whom were fully vaccinated with Covishield and eight with Covaxin.

How significant are such infections?

It appears that so far breakthroughs are not translating into serious disease requiring hospitalisation. In the Kerala analysis, 151 were “mildly symptomatic” and four were asymptomatic. A third were healthcare workers, who because of prolonged and close exposure to a variety of patients are at a greater risk of contracting infection. In recent months, more studies are emerging on ‘breakthrough infections’. A preprint by researchers at the CSIR-Institute of Genomics and Integrative Biology (CSIR-IGIB) and Max Hospitals in Delhi found that nearly a quarter of 600 fully vaccinated healthcare workers contracted the virus after vaccination. Earlier, studies from the CMC, Vellore, and PGIMER, Chandigarh, too had reported that between 1% and 10% of fully vaccinated healthcare workers had contracted the infection. Less than 5% needed hospitalisation and no lives were lost, indicating that vaccines were effective in preventing severe sickness and death. Internationally, the trend is not too different either. Israel and the U.S., despite high vaccination coverage, continue to report fresh cases, though the infection rate is much higher in the unvaccinated.

There was a qualitative difference between the CSIR study and the others. While the CMC and PGIMER reports showed ‘breakthrough infections’ as those confirmed by a gold-standard RT-PCR test, the CSIR study relied on a blood test that measured levels of antibodies directed towards the nucleocapsid region of the coronavirus, which is different from the region (spike protein) that vaccine-generated antibodies normally target. Currently, all the vaccines are designed to produce antibodies against the spike protein and so high levels of antibodies against the nucleocapsid region were presumed markers of a fresh coronavirus infection. None of the infections made the healthcare workers sick enough to warrant a test and so it could well be that the number of ‘breakthrough infections’ are much higher than those confirmed by RT-PCR tests. The bigger concern, however, is that those with a ‘breakthrough infection’, under the belief that they are fully protected, may be less stringent with using masks and could be carriers of infection. The U.S. Centers for Disease Control and Prevention reports that the viral load in those with a ‘breakthrough infection’ can be as much as those unvaccinated, which is why mask mandates are back despite significant vaccination coverage.

That ‘breakthrough infections’ occur is not a surprise. In clinical trials, all vaccines available have reported efficacy rates between 70% and 90%. This implies that between 10% and 30% of a vaccinated population will be vulnerable to infection. Vaccines, however, were premised on inuring the body to disease and so far the evidence is that they are overwhelmingly effective.

Is the Delta variant responsible for the rise in cases?

When the underlying coronavirus variants were analysed in the Kerala study, 126 were found to have the Delta variant (B.1.617.2), nine had the Kappa variant (B.1.617.1) and six had Delta-Plus variants, that is sub-lineages of the Delta with one or more of its defining mutations. These mutations mostly help the virus escape detection by antibodies. The India SARS-CoV-2 Genome Consortium (INSACOG), which monitors emerging variants nationally, has analysed 51,651 coronavirus genomes as of August 30. Of them, 31,721 cases were international variants of concern and among them 21,449 were Delta variants. A mere 393 cases were Delta-Plus, though many Delta variants are in the process of being reclassified as Delta-Plus (there are 13 such sublineages) because, while it does not necessarily make them more virulent or harmful, they serve as markers of an evolutionary change in the coronavirus and need to be tracked, say genome scientists. Delta has also been demonstrated to reduce antibody levels elicited by vaccines. Antibody levels are not the only measure of protection and immunity by T-cells, which cannot be easily evaluated in a lab, are also important for neutralising the virus. However, vaccine production technologies such as m-RNA and DNA are premised on their ability to be tweaked quickly for newer variants. The makers of Covaxin claim that their vaccine, being an inactivated whole virus, is geared up to be more effective against variants than other vaccines primarily targeted at the spike protein. An ICMR study showed a 65.2% protection against the Delta variant in a double-blind, randomised, multicentre, Phase 3 clinical trial of Covaxin.

Source: The Hindu

3. Nipah virus in the time of Covid-19

Relevant for GS Prelims & Mains Paper III; Science & Technology

A 12-year-old boy infected with the Nipah virus died in a private hospital in Kozhikode on Sunday morning. The boy showed symptoms of encephalitis and myocarditis – inflammation of the brain and heart muscles respectively.

The re-emergence of the Nipah virus in Kerala poses a fresh risk in the state that is already struggling with the Covid-19 pandemic, contributing about 60% of all new cases in the country these days. However, this is not the first time that Nipah virus has been detected in Kerala, or elsewhere in India, and previous outbreaks have remained largely localised and have been contained relatively quickly.

What is the Nipah virus?

The first outbreaks of the Nipah virus among humans was reported from Malaysia (1998) and Singapore (1999). The virus takes its name from the village in Malaysia where the person in whom the virus was first isolated died of the disease.

Since it was first identified in 1998-99, there have been multiple outbreaks of the Nipah virus, all of them in South and Southeast Asian nations. In Bangladesh, there have been at least 10 outbreaks since 2001.

In India, West Bengal had seen an outbreak in 2001 and 2007, while Kerala had reported several cases in 2018.

How does Nipah virus spread?

It is a zoonotic virus, meaning it has been transmitted from animals to human beings. The transmission happens mainly through consumption of contaminated food. But human-to-human transmission is also considered possible. The animal host reservoir for this virus is known to be the fruit bat, commonly known as flying fox. Fruit bats are known to transmit this virus to other animals like pigs, and also dogs, cats, goats, horses and sheep.

Humans get infected mainly through direct contact with these animals, or through consumption of food contaminated by saliva or urine of these infected animals. Person-to-person transmission is not fully established, but a recent study, published by two Bangladeshi researchers in March this year, said that previous outbreaks in Bangladesh, the Philippines and India suggested “that respiratory droplets of an infected person can transmit the virus”. During previous outbreaks, people in close contact with the infected person, mainly hospital staff and caregivers, have contracted the disease.

Does Nipah spread as fast as Covid-19?

The Nipah virus is known to spread far more slowly than SARS-CoV-2. However, it is its ability to kill that is the biggest concern. During the first outbreak in Siliguri, 45 of the 66 people confirmed to have been infected died. That is a mortality rate of 68%. In the next outbreak, in Nadia district of West Bengal, in 2007, all the five infected people died.

During the most recent outbreak in Kerala in 2018, 17 of the 18 patients confirmed to have been infected died. In 2019, one case of Nipah virus infection was detected in Ernakulam, but prompt response restricted any further spread. The infected person survived.

In the Malaysian outbreak in 1999, a total of 265 people had been found infected, of whom 105 had died, according to a study, ‘Nipah Virus: Past Outbreaks and Future Containment’, by researchers from Cochin University of Science and Technology published in the April 2020 issue of the journal Viruses.

In comparison, the mortality rate of Covid-19 epidemic is expected to be around one per cent.

How well has Kerala handled previous Nipah outbreaks?

In 2018, Kerala had no past experience of handling a disease with such a high fatality rate. The state followed the protocol for Ebola virus disease which had been reported mainly in sub-Saharan Africa.

At one point in June 2018, around 3,000 people were under quarantine in Kozhikode and nearby Malappuram districts. All the persons who had direct or indirect contact with the suspected Nipah cases were thus put under observation.

When the state reported Nipah again in 2019, the health department already had a protocol in place to handle the situation. In 2019, only one case was reported in Ernakulam district.

In 2020, the state did not report any Nipah case, but the protocol was updated and sent across the system.

How is Kerala handling the fresh Nipah concerns alongside Covid-19?

The Nipah virus victim hailed from the village of Chathamangalam, 50 km from Changaroth. Three wards under Chathamangalam panchayat in Kozhikode, where the victim lived, were completely closed down on Sunday morning. Micro-level restrictions have gone into effect. Movement to and from these three wards have been banned. Police have put up barricades and checkpoints at all locations leading to the village of the victim.

With Covid-19 protocols already in place, there is heightened awareness about transmission of viral diseases. The ongoing use of PPE kits, gloves and masks, especially by healthcare workers and hospital staff, is likely to offer reduced opportunity for the transmission of the Nipah virus.

Should other states worry about Nipah spreading?

Thus far, all outbreaks of the Nipah virus have been localised and contained quickly, at least in comparison to the ongoing Covid-19 pandemic. The first outbreak in Malaysia started in September 1998, although it was only by March next year that scientists were able to confirm that this was a new virus they were dealing with. The outbreak was contained by May. In Bangladesh, where Nipah outbreaks have been the most recurrent, the transmissions have stopped after a couple of months.

One of the main reasons for a relatively quick end to an outbreak is the fact that Nipah virus is far less infective than SARS-CoV-2, for example. Human-to-human transmission is not as easy, or as fast, as seen in the case of SARS-CoV-2.

A study by Bangladeshi researchers P Devnath of Noakhali Science and Technology University and H M A A Masud of Chittagong University, published this year, noted that the reproductive number (R0) in the previous outbreaks of Nipah virus was about 0.48. The R-value is a measure of how quickly the virus spreads in the population. A value less than one means less than one person is being infected by an already infected person. In such a scenario, the outbreak is expected to diminish relatively quickly.

The study also notes that since Nipah outbreaks have happened mainly in sparsely populated villages, the potential of the virus to spread to many individuals has been low. Further, the very high death rates also contribute to low transmission.

Source: The Indian Express

4. Account Aggregators: new framework to access, share financial data

Relevant for GS Prelims & Mains Paper III; Economics

On September 2 eight of India’s major banks — State Bank of India, ICICI Bank, Axis Bank, IDFC First Bank, Kotak Mahindra Bank, HDFC Bank, IndusInd Bank and Federal Bank — joined the Account Aggregator (AA) network that will enable customers to easily access and share their financial data. The framework, which has been under discussion since 2016 and in the testing phase for some time, will now be open to all customers.

What is an Account Aggregator?

According to the Reserve Bank of India, an Account Aggregator is a non-banking financial company engaged in the business of providing, under a contract, the service of retrieving or collecting financial information pertaining to its customer. It is also engaged in consolidating, organising and presenting such information to the customer or any other financial information user as may be specified by the bank.

The AA framework was created through an inter-regulatory decision by RBI and other regulators including Securities and Exchange Board of India, Insurance Regulatory and Development Authority, and Pension Fund Regulatory and Development Authority (PFRDA) through and initiative of the Financial Stability and Development Council (FSDC). The licence for AAs is issued by the RBI, and the financial sector will have many AAs.

The AA framework allows customers to avail various financial services from a host of providers on a single portal based on a consent method, under which the consumers can choose what financial data to share and with which entity.

What does an Account Aggregator do?

It reduces the need for individuals to wait in long bank queues, use Internet banking portals, share their passwords, or seek out physical notarisation to access and share their financial documents. An Account Aggregator is a financial utility for secure flow of data controlled by the individual.

“Account Aggregators are an exciting addition to India’s digital infrastructure as it will allow banks to access consented data flows and verified data. This will help banks reduce transaction costs, which will enable us to offer lower ticket size loans and more tailored products and services to our customers. It will also help us reduce frauds and comply with upcoming privacy laws,” said Anjani Rathor, Chief Digital Officer, HDFC Bank.

Sumit Gwalani, cofounder of the financial app Fi (Epifi), said, “We know that users have multiple bank accounts, so when they leverage a feature like Ask.Fi, and ask for example how much they’ve spent, or how much they’ve saved, Fi can now give them an answer that scans all their accounts, in milliseconds. This is a big step towards a connected financial ecosystem.”

AAs with an operating licence include CAMSFinServ, Cookiejar Technologies (FinVu), FinSec AA Solutions (OneMoney) and NESL Asset Data Limited. AAs with in-principle approval include Perfios Account Aggregation Services, PhonePe Technology Services and Yodlee Finsoft.

How does it work?

It has a three-tier structure: Account Aggregator, FIP (Financial Information Provider) and FIU (Financial Information User).

An FIP is the data fiduciary, which holds customers’ data. It can be a bank, NBFC, mutual fund, insurance repository or pension fund repository. An FIU consumes the data from an FIP to provide various services to the consumer. An FIU is a lending bank that wants access to the borrower’s data to determine if the borrower qualifies for a loan. Banks play a dual role – as an FIP and as an FIU.

An AA should not support transactions by customers but should ensure appropriate mechanisms for proper customer identification. An AA should share information only with the customer to whom it relates or any other financial information user as authorised by the customer.

“AAs enable secure, consented data flows while protecting user privacy. In conjunction with other platforms like the UPI, Account Aggregator creates in India the most cutting edge digital financial infrastructure in the world,” said M Rajeshwar Rao, Deputy Governor, Reserve Bank of India.

What purpose does it serve?

According to iSpirt, a think tank for the Indian software products industry, an AA creates secure, digital access to personal data at a time when Covid-19 has led to restrictions on physical interaction. It reduces the fraud associated with physical data by introducing secure digital signatures and end-to-end encryption for data sharing.

These capabilities in turn open up many possibilities. For instance, whereasphysical collateral is usually required for an MSME loan, with secure data sharing via AA, ‘information collateral’ (or data on future MSME income) can be used to access a small formal loan. HDFC Bank andAxisBank have been using AA for auto loans, LendingKart for MSME loans, and IndusInd Bank for personal finance management.

What data can be shared?

An Account Aggregator allows a customer to transfer his financial information pertaining to various accounts such as banks deposits, equity, mutual fund and pension funds to any entity requiring access to such information. There are 19 categories of information that fall under ‘financial information’, besides various other categories relating to banking and investments. For sharing of such information, the FIU is required to initiate a request for consent by way of any platform/app run by the AA. Such a request is received by the individual customer through the AA, and the information is shared by the AA, after consent is obtained.

“The AA framework is an excellent initiative that will compile all the digital footprints of the customer at one place and make it easy for lenders like us to access it. It will enable us to provide very quick turnarounds to our customers,” said Manoj Viswanathan, MD & CEO of HomeFirst Finance.

Source: The Indian Express

5. If next iPhone has satellite connectivity, this is the tech Apple will use

Relevant for GS Prelims & Mains Paper III; Science & Technology

Since earlier this week, the Internet has been abuzz with news that the next-generation iPhone could have satellite connectivity, thus enabling it to make calls without a cellular network. Apple, as usual, has not confirmed any details about its 2021 iPhone which might get announced as early as this month. But even the thought of a mainstream smartphone that lets you make calls from a remote area or at the time of emergency is significant at many levels. But is the technology there yet?

How did this news come out?

It all started when top Apple analyst Ming-Chi Kuo said the iPhone 13 will support low-orbit satellite communication, a report corroborated by a Bloomberg report. The Bloomberg report said the ‘iPhone 13’ will come with satellite communication capabilities, but limited to emergency calls and texts when the phone signal is not available. In theory, this would mean that those with the new iPhone would be able to send messages and make calls using satellite networks. Kuo claimed Apple’s next-generation iPhone 13 will feature a low-earth-orbit (LEO) satellite communication mode.

What does Low Earth Orbit (LEO) mean?

Low earth orbit (LEO) satellites operate 311 miles (roughly 500 kilometers) above the Earth’s surface. There are hundreds of satellites that move around at this height. Because they are closer to the earth’s surface, unlike traditional satellites that are stationed higher at roughly 36,000 km, the time needed for data to be sent and returned is shorter. This lower latency is why everyone from OneWeb backed by Sunil Bharti Mittal to Elon Musk’s Starlink are banking on such satellites to beam down high-speed internet service to remote parts of the world.

What is a satellite phone?

The concept of a satellite phone is not new. In fact, the first satellite phone was launched by Motorola in 1989. A satellite phone, or satphone as it is commonly called, works by connecting to a telecommunications satellite in space. What makes a satellite phone different from current smartphones is that they are capable of receiving and making calls anywhere in the world, even in the remotest parts be it the Himalayas or an uninhabited island in the Pacific. Instead of depending on a GSM network, they are tied to a satellite company. Satellite phones are commonly available in the US market at different price points. Garmin inReach, for instance, has a built-in satellite receiver that lets you send and receive SMS via the Iridium network. Thuraya X5-Touch, meanwhile, is a ruggedised Android-powered smartphone with support for GSM/LTE networks as well.

One common thing about satellite phones is that they have an outer antenna system to catch signals. This means they don’t look like a modern smartphone, where the antenna is placed along with the phone’s metal frame.

How will Apple add satellite communications to the iPhone 13?

What is being speculated is that the iPhone 13 will use a modified Qualcomm X60 baseband chip which going to be the X65 5G modem for the rest of the smartphone market. But even if Apple uses a custom modem from Qualcomm, the company has to have a tie-up with satellite Internet service providers like Inmarsat, Iridium, Thuraya, or Globalstar. Kuo believes Apple will reportedly use Globalstar’s satellite constellation, where the coverage is only limited to North and South America, Europe and northern Asia, Russia and Australia.

… but Globalstar has a tie-up with Qualcomm

Globalstar has been working with Qualcomm for a while now and earlier this year the two companies announced the former’s n53 band in Qualcomm’s X65 modem. Simply put, Globalstar’s n53 band has support for 5G NR, or New Radio. It is impossible for Apple to add an external antenna on top of the next iPhone. But what is a very likely possibility is that Apple switches to n53 for improving the iPhone 13’s 5G support capability.

Will this work smoothly?

The point to be highlighted here is that satellite data speeds are super slow, plus the iPhone’s lack of an external antenna could be a hindrance. Plus, satellite plans aren’t cheap as they cost hundreds of dollars a year. Even if the iPhone 13 is a satellite phone, it would become a USP. The audience for a satellite phone is still completely niche.

Does Apple have ambitions to compete with Starlink?

There have been reports earlier that the Tim Cook-led company may be interested in satellites. Back in 2019, Bloomberg’s Mark Gurman reported that Apple had hired a “top secret team” working on internet satellites. We haven’t seen an outcome of that team yet nor has Apple ever admitted to any such product. If Apple is seriously looking at this space, the company might not compete with Musk’s Starlink. Instead, Apple would want to use the low-earth-orbit (LEO) satellite communication mode to improve maps, better connectivity within its devices, and possibly a way to add network capabilities on future products, including the rumoured AR/VR headset and the Apple Car.

Source: The Indian Express

6. Finance Minister launches the National Monetisation Pipeline

Relevant for GS Prelims & Mains Paper III; Economics

Union Minister for Finance and Corporate Affairs, Smt Nirmala Sitharaman, launched the asset monetisation pipeline of Central ministries and public sector entities: ‘National Monetisation Pipeline (NMP Volumes 1 & 2)’. The pipeline has been developed by NITI Aayog, in consultation with infrastructure line ministries, based on the mandate for ‘Asset Monetisation’ under Union Budget 2021-22. NMP estimates aggregate monetisation potential of Rs 6.0 lakh crores through core assets of the Central Government, over a four-year period, from FY 2022 to FY 2025.

Volumes 1 and 2 of the report on NMP was released today in the presence of Vice Chairman (NITI Aayog), CEO (NITI Aayog), and Secretaries of infrastructure line ministries included under the pipeline—Roads, Transport and Highways, Railways, Power, Pipeline and Natural Gas, Civil Aviation, Shipping Ports and Waterways, Telecommunications, Food and Public Distribution, Mining, Coal and Housing and Urban Affairs—along with Secretary (Department of Economic Affairs) and Secretary (Department of Investment and Public Asset Management).

Union Minister of Finance, while launching the pipeline, said, “The Asset Monetisation programme has taken shape because of the vision of our Hon’ble Prime Minister who has always believed in universal access to high-quality and affordable infrastructure to the common citizen of India. Asset monetisation, based on the philosophy of Creation through Monetisation, is aimed at tapping private sector investment for new infrastructure creation. This is necessary for creating employment opportunities, thereby enabling high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare.” Smt. Sitharaman further enumerated the reforms and initiatives undertaken by the current Government towards accelerated infrastructure development and for incentivizing private sector investments. This included the recent ‘Scheme of Financial Assistance to States for Capital Expenditure’, which incentivizes State Governments to recycle State Government-owned asset for fast-tracking greenfield infrastructure.

“The strategic objective of the programme is to unlock the value of investments in brownfield public sector assets by tapping institutional and long-term patient capital, which can thereafter be leveraged for further public investments,” Vice Chairman, NITI Aayog, said during the launch. He emphasized on the modality of such unlocking, which is envisaged to be by way of structured contractual partnership as against privatization or slump sale of assets.

NMP is envisaged to serve as a medium-term roadmap for identifying potential monetisation- ready projects, across various infrastructure sectors. CEO, NITI Aayog said, “The NMP is aimed at creating a systematic and transparent mechanism for public authorities to monitor the performance of the initiative and for investors to plan their future activities. Asset Monetisation needs to be viewed not just as a funding mechanism, but as an overall paradigm shift in infrastructure operations, augmentation and maintenance considering private sector’s resource efficiencies and its ability to dynamically adapt to the evolving global and economic reality. New models like Infrastructure Investment Trusts  & Real Estate Investment Trusts will enable not just financial and strategic investors but also common people to participate in this asset class thereby opening new avenues for investment. I hence consider the NMP document to be a criticalstep towards making India’s Infrastructure truly world class.”

NMP is a culmination of insights, feedback and experiences consolidated through multi-stakeholder consultations undertaken by NITI Aayog, Ministry of Finance and line ministries. Several rounds of discussion have been held by NITI Aayog with the stakeholders. The pipeline has been deliberated at length in inter-ministerial meeting chaired by Cabinet Secretary. This is therefore a whole of a government initiative.

Secretaries of all infrastructure ministries affirmed their resolve towards achieving their respective targets set under NMP, working jointly with NITI Aayog and Ministry of Finance.

As part of a multi-layer institutional mechanism for overall implementation and monitoring of the Asset Monetization programme, an empowered Core Group of Secretaries on Asset Monetization (CGAM) under the chairmanship of Cabinet Secretary has been constituted. The Government is committed to making the Asset Monetisation programme, avalue-accretive proposition both for the public sector and private investors/developers, through improved infrastructure quality and operations and maintenance. This is aimed at achieving the broader and longer-term vision of ‘inclusiveness and empowerment of common citizens through best in class infrastructure’.

National Monetisation Pipeline: An Introduction

Union Budget 2021-22 has identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing. Towards this, the Budget provided for preparation of a ‘National Monetisation Pipeline (NMP)’ of potential brownfield infrastructure assets. NITI Aayog in consultation with infra line ministries has prepared the report on NMP.

NMP aims to provide a medium term roadmap of the programme for public asset owners; along with visibility on potential assets to private sector. Report on NMP has been organised into two volumes. Volume I is structured as a guidance book, detailing the conceptual approaches and potential models for asset monetisation. Volume II is the actual roadmap for monetisation, including the pipeline of core infrastructure assets under Central Govt.


The pipeline has been prepared based on inputs and consultations from respective line ministries and departments, along with the assessment of total asset base available therein. Monetization through disinvestment and monetization of non-core assets have not been included in the NMP. Further, currently, only assets of central government line ministries and CPSEs in infrastructure sectors have been included. Process of coordination and collation of asset pipeline from states is currently ongoing and the same is envisaged to be included in due course.

The framework for monetisation of core asset monetisation has three key imperatives.

This includes selection of de-risked and brownfield assets with stable revenue generation profile with the overall transaction structured around revenue rights. The primary ownership of the assets under these structures, hence, continues to be with the Government with the framework envisaging hand back of assets to the public authority at the end of transaction life.

Estimated Potential

Considering that infrastructure creation is inextricably linked to monetisation, the period for NMP has been decided so as to be co-terminus with balance period under National Infrastructure Pipeline (NIP).

The aggregate asset pipeline under NMP over the four-year period, FY 2022-2025, is indicatively valued at Rs 6.0 lakh crore. The estimated value corresponds to ~14% of the proposed outlay for Centre under NIP (Rs 43 lakh crore). This includes more than 12 line ministries and more than 20 asset classes. The sectors included are roads, ports, airports, railways, warehousing, gas & product pipeline, power generation and transmission, mining, telecom, stadium, hospitality and housing.

Sector wise Monetisation Pipeline over FY 2022-25 (Rs crore)

The top 5 sectors (by estimated value) capture ~83% of the aggregate pipeline value. These top 5 sectors include: Roads (27%) followed by Railways (25%), Power (15%), oil & gas pipelines (8%) and Telecom (6%).

In terms of annual phasing by value, 15% of assets with an indicative value of Rs 0.88 lakh crore are envisaged to be rolled out in the current financial year (FY 2021-22). However, the aggregate as well as year on year value under NMP is only an indicative value with the actual realization for public assets depending on the timing, transaction structuring, investor interest etc.

Indicative value of the monetisation pipeline year-wise (Rs crore)

The assets and transactions identified under the NMP are expected to be rolled out through a range of instruments. These include direct contractual instruments such as public private partnership concessions and capital market instruments such as Infrastructure Investment Trusts (InvIT) among others. The choice of instrument will be determined by the sector, nature of asset, timing of transactions (including market considerations), target investor profile and the level of operational/investment control envisaged to be retained by the asset owner etc.

The monetisation value that is expected to be realised by the public asset owner through the asset monetisation process, may either be in form of upfront accruals or by way of private sector investment. The potential value assessed under NMP is only an indicative high level estimate based on thumb rules. This is based on various approaches such as market or cost or book or enterprise value etc. as applicable and available for respective sectors.

Implementation & Monitoring Mechanism

As an overall strategy, significant share of the asset base will remain with the government.

The programme is envisaged to be supported through necessary policy and regulatory interventions by the Government in order to ensure an efficient and effective process of asset monetisation. These will include streamlining operational modalities, encouraging investor participation and facilitating commercial efficiency, among others. Real time monitoring will be undertaken through the asset monetisation dashboard, as envisaged under Union Budget 2021-22, to be rolled out shortly.

The end objective of this initiative to enable ‘Infrastructure Creation through Monetisation’ wherein the public and private sector collaborate, each excelling in their core areas of competence, so as to deliver socio-economic growth and quality of life to the country’s citizens.

Source: PIB