Bengaluru: The state government has set up a committee to inventorise all government properties to explore “asset monetisation with private participation” to increase non-tax revenue and identify key development works.
In an order dated August 23, the state government said there was a need to “identify” the opportunities for asset monetisation in “different sectors” of the state and to recommend steps and guidelines to implement the monetisation scheme in a “transparent and judicious” manner.
The move comes days after the state government planned to monetise 25,000 acres of land near Bengaluru in a “state-guided urbanisation plan”.
“At present the public-private partnership (PPP) is limited to management and implementation of a few development works of government departments. An effective PPP to create new infrastructure and resources to take the government on the path of development. For this, asset monetisation would help bring expertise and technology from the private sector,” the order said.
According to the order, a five-member committee headed by retired IAS officer K P Krishnan has been set up. Former chairman of Central Board of Indirect Taxes & Customs Najib Shah, retired IAS officer H Shashidhar, Institute for Social and Economic Change professor Krishna Raj and Additional Chief Secretary, Finance Department are the other members.
The mandates of the committee are: identifying the projects for asset monetisation under PPP to increase revenue, form “strong” guidelines for implementation of PPP asset monetisation in a transparent way, recommend measures for increasing tax and non-tax receipts and identify new non-tax revenue sources.
“All government departments/local bodies/universities/boards and corporations shall submit the information and extend cooperation to the committee,” the order said.
The committee has been given 12 months to submit its report. In addition to the above terms, the government can delegate additional work to the committee, which has been advised to come up with procedures to take up its work.
The total receipts of the exchequer have increased from Rs 1.77 lakh crore in 2019-20 to Rs 2.26 lakh crore according to revised estimates of 2023-24, a 27 per cent growth. However, fiscal deficit has deepened during the same period, from Rs 38,752 crore to Rs 68,505 crore.
The budget for 2024-25 estimates the deficit to widen further to Rs 82,980 crore, or 31per cent of the estimated total receipts of Rs 2.63 lakh crore. This, amid the high expenditure on guarantee schemes, has put the government on the mat.
To a question, Additional Chief Secretary L K Atheeq clarified taking information from government departments, local bodies, universities and boards doesn’t mean monetising their assets.
“The committee will only examine the key sources of revenue and opportunities for asset monetisation. There is no intention to monetise all the government assets. Even then, the proposals by the committee are placed before the Cabinet,” he said.
M S Sriram, professor, public policy, Indian Institute of Management Bangalore, said asset monetisation has become the last resort for a cash-strapped government in the wake of limited tax revenues during the GST regime.
“Unlike the time when governments increased revenue through VAT, state-specific taxation is now limited to liquor, petrol, property and stamps and registration. Rest of the things are under the GST, which has become a bad idea from the point of view of federalism. Asset monetisation seems to be the only way left to the government to fund its schemes,” he said.