Published on: August 30, 2021
NITI AAYOG ON MONETIZATION
What is in news : NITI Aayog has recommended various measures to boost monetization
- Income Tax breaks to attract retail investors into instruments such as Infrastructure Investment Trusts (InvITs)
- Bringing such trusts within the ambit of the Insolvency and Bankruptcy Code (IBC) to provide greater comfort to investors
- Bringing in policy and regulatory changes to scale up monetisation instruments such as InvITs and Real Estate Investment Trusts (REITs) and expand their investor base
- InvIT and REIT route to monetise public assets such as highways, gas pipelines, railway tracks and power transmission lines
MAHITI FOR PRELIMS
- A REIT is roughly like a mutual fund that invests in real estate although the similarity doesn’t go much further.
- The basic deal on REITs is that you own a share of property, and so an appropriate share of the income from it will come to you, after deducting an appropriate share of expenses.
- Essentially, it’s like a group of people pooling their money together and buying real estate except that it’s on a large scale and is regulated.
- It is like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return.
- InvITs can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.
- They are similar to REIT but invest in infrastructure projects such as roads or highways which take some time to generate steady cash flows.