Asset Monetisation: A Step Towards Liberalisation and Privatisation–Strategic Issues

Published date01 December 2022
Date01 December 2022
Subject MatterArticles
Asset Monetisation: A
Step Towards
Liberalisation and
Nand L. Dhameja1, Samo Bobek2, Manish Dhameja3,
Amandeep Dhaliwal1 and Ridhi Khattar1
Privatisation, a buzzword of the 20th century, has varied approaches; it could be
a broad approach of liberalisation to introduce market forces without any change
of ownership, termed as ‘partial privatisation’. In narrow terms, it refers to dena-
tionalisation or divestiture and change of ownership by sale to private individuals.
Public sector in India has grown over the years and operational autonomy has been
granted. Disinvestment of government shareholding, has been an annual budgetary
exercise; it includes strategic sale. Of late, various disinvestment approaches that
are followed include share buyback, cross shareholding offer for sale, follow-on
public offer, block deal exchange trade fund. The realisation of disinvestment has
been about 56% of the total, and new options have to be explored.
Asset monetisation, an approach to encash assets with an objective to raise
resources to finance new projects, is planned with an objective to develop infra-
structure by involving private sector by following different forms of the pub-
lic–private partnership approach. National Monetisation Policy (NMP) has been
announced by the government of India to raise `600,000 crore over the period
of next four years, that is, from 2022 to 25, to cover up the infrastructure gap. As
such, monetisation of assets—core as well as non-core—would be a great step
in achieving the objective of Atmanirbhar Bharat [self-reliant India], and India to
become $5 trillion economy by 2024. Privatisation, liberalisation and asset mon-
etisation appear to be a simple theoretical exercise; it would require planning for
newer approaches to attract private funds and also to have political will.
Privatisation, liberalisation, assets monetisation, core assets, non-core assets,
brownf‌ield projects, infrastructure projects
Indian Journal of Public
68(4) 624–639, 2022
© 2022 IIPA
Reprints and permissions:
DOI: 10.1177/00195561221109211
1 Faculty of Management Studies, Manav Rachna International Institute of Research and Studies,
Faridabad, Haryana, India.
2 Department of e-Business, School of Economics and Business, University of Maribor, Slovenia.
3 Chief Wholesale Banking, Sohar International Sultanate of Oman, Oman.
Corresponding author:
Nand L. Dhameja, Faculty of Management Studies, Manav Rachna International Institute of Research
and Studies, Faridabad, Haryana 121004, India.
Dhameja et al. 625
Privatisation, a buzzword of the 20th century, has different connotations and had
been adopted in more than hundred countries, particularly so in developing
countries on their liberalisation from the colonial rule. This study is planned to
discuss and analyse developments in assets monetisation, liberalisation and
privatisation approaches, problems and strategies for future. The study primarily
relates to India, yet lessons learnt and drawn from the experiences of other
countries are referred to. The study is exploratory in nature which examines and
analyses the changing nature and role of the public sector. The study addresses the
following issues:
•   Meaning, significance  and objectives  of privatisation,  and experiences  of 
developed and other countries;
•   Public sector reforms, growth and challenges;
•   Policy towards disinvestment, and targets and achievements over the years;
•   Assets monetisation and liberalisation approach: resource estimation—core 
and non-core assets; and
•   Assets monetisation: issues and challenges.
The study is presented into six parts. The rst part, introductory in nature, presents 
experiences of privatisation abroad and the economic policy framework in India,
dening the meaning and forms of privatisation. Forms of public sector, its devel-
opments and  changes over  the years  are the  subject matter  of the  second part.  It 
also presents details of public enterprises (PEs), their origin, growth and aspects of
autonomy. Government policy relating to disinvestment, as a part of New Industrial
Policy, its targets and achievements, and also various diverse approaches of disin-
vestment adopted over the years are covered in the third part. Corporatisation of
ordnance factories, assets monetisation as an approach to liberalisation and to raise
resources is the subject matter of the fourth part. This part highlights meaning and 
estimates of assets monetisation realisation from different Central government
ministries and Central Public Sector Enterprises (CPSEs) and non-core assets over
the years. Problem areas, issues and challenges of assets monetisation are detailed
in the fth part. Summary and conclusions are presented in the last part.
Privatisation: Meaning and Experience Abroad
Privatisation, as mentioned earlier, has varied connotations and has been adopted
in different countries. The United Kingdom is considered as the pioneer on the
path of privatisation. It took support from Conservative Government Manifesto of 
1987. A white  paper  issued by  the  government  argued that  privatisation  would 
provide autonomy, protect from uctuating political pressures, encourage compe-
tition and  would  ensure  benets of  greater  efciency. Privatisation  was mostly 
used as a divestiture of public assets and transfer of ownership by sale of enter-
prises owned by the government, and it is termed as ‘workers’ capitalism’.
West Germany concentrated on three areas of privatisation, namely, industry,
transport and  banking.  France  privatised  a  multitude  of  banks,  finance  houses, 

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