What is the key distinction between monetisation under the NMP and privatisation?

Under monetisation, the government retains ownership while leasing operation to private parties; under privatisation ownership transfers

Monetisation involves selling assets to foreign companies while privatisation involves domestic buyers

Monetisation applies only to loss-making assets while privatisation applies to profitable ones

There is no meaningful distinction — both involve transfer of assets to the private sector

Under the Infrastructure Investment Trust (InvIT) model, how does asset monetisation work?

Assets are pooled into a trust, units of which are sold to investors, with proceeds used for fresh infrastructure

The government sells the asset directly to a private company through a competitive bid

The government borrows against the value of the asset through the bond market

A public-private partnership is formed with the government retaining a majority stake

Current Affairs and GK · 5 questions · about 1 min to read

National Monetisation Pipeline

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The passage

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The National Monetisation Pipeline (NMP), launched in August 2021, is a framework for leasing core infrastructure assets of the Central Government to private operators to raise funds for new infrastructure investment. The NMP targets monetising assets worth Rs. 6 lakh crore over the period 2021–22 to 2024–25. It is important to distinguish monetisation from privatisation: under the NMP, the government retains ownership of the underlying assets while leasing their operation to private parties for defined periods. At the end of the lease, assets revert to the government.

The asset categories included in the NMP span roads (NHAI's national highway network), railways (stations, freight corridors), power transmission lines, natural gas pipelines, telecom (BSNL/MTNL towers), airports, and sports stadiums. The primary instrument used is the Toll-Operate-Transfer (TOT) model for roads and the Infrastructure Investment Trust (InvIT) structure. Under the InvIT model, assets are pooled into a trust, units of which are sold to investors, with the proceeds used for fresh infrastructure development.

Q1. The National Monetisation Pipeline was launched in:
1. August 2019
2. August 2020
3. August 2021
4. March 2022
Show answer
Answer: C. August 2021
The passage states: 'The National Monetisation Pipeline (NMP), launched in August 2021.'
Q2. What is the key distinction between monetisation under the NMP and privatisation?
1. Monetisation involves selling assets to foreign companies while privatisation involves domestic buyers
2. Under monetisation, the government retains ownership while leasing operation to private parties; under privatisation ownership transfers
3. Monetisation applies only to loss-making assets while privatisation applies to profitable ones
4. There is no meaningful distinction — both involve transfer of assets to the private sector
Show answer
Answer: B. Under monetisation, the government retains ownership while leasing operation to private parties; under privatisation ownership transfers
The passage states: 'the government retains ownership of the underlying assets while leasing their operation to private parties for defined periods. At the end of the lease, assets revert to the government.'
Q3. The NMP target for monetisation over 2021–22 to 2024–25 is:
1. Rs. 3 lakh crore
2. Rs. 4.5 lakh crore
3. Rs. 6 lakh crore
4. Rs. 10 lakh crore
Show answer
Answer: C. Rs. 6 lakh crore
The passage states: 'The NMP targets monetising assets worth Rs. 6 lakh crore over the period 2021–22 to 2024–25.'
Q4. Under the Infrastructure Investment Trust (InvIT) model, how does asset monetisation work?
1. The government sells the asset directly to a private company through a competitive bid
2. Assets are pooled into a trust, units of which are sold to investors, with proceeds used for fresh infrastructure
3. The government borrows against the value of the asset through the bond market
4. A public-private partnership is formed with the government retaining a majority stake
Show answer
Answer: B. Assets are pooled into a trust, units of which are sold to investors, with proceeds used for fresh infrastructure
The passage explains: 'assets are pooled into a trust, units of which are sold to investors, with the proceeds used for fresh infrastructure development.'
Q5. The Toll-Operate-Transfer (TOT) model is used in the NMP primarily for:
1. Railways
2. Airports
3. Roads
4. Telecom towers
Show answer
Answer: C. Roads
The passage states: 'The primary instrument used is the Toll-Operate-Transfer (TOT) model for roads and the Infrastructure Investment Trust (InvIT) structure.'

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