States should consider selling infrastructure-related assets to increase revenue: RBI report

According to a Reserve Bank study released on Monday, states’ finances improved in FY23 and asset monetization has to be considered in order to assist in raising non-tax income.

The Reserve Bank said in the yearly report on state budgets that the states have a great deal of opportunity to sell assets in the transportation, electricity, and road sectors.

“In order to enhance non-tax income, states must intensify their asset monetization operations. The research proposed that the monetization of assets be pursued in order to unlock their value, minimize holding costs, and facilitate the rapid deployment of limited public money into new projects, hence expediting the building of new infrastructure.

According to the paper, states have a sizable asset base of infrastructure that has considerable potential in the areas of transportation, electricity, and roadways.

It suggested raising money by doing a thorough assessment of underutilized land holdings, turning them into industrial estates that generate income, or selling them outright.

According to the RBI research, governments may accelerate the liquidation of non-operational public sector enterprises (PSUs) in order to reduce losses.