National Monetisation Pipeline (NMP)

The National Monetisation Pipeline (NMP) is an ambitious framework launched by the Government of India in August 2021 to unlock the value of the country’s existing brownfield public infrastructure assets. It seeks to generate long-term revenues for the government through monetisation of operational assets, without diluting public ownership. The initiative represents a major step in leveraging private sector investment and expertise for infrastructure development, thereby supporting India’s economic growth and the National Infrastructure Pipeline (NIP).

Background and Context

India’s infrastructure development has traditionally relied on public investment, which often faces constraints due to fiscal limitations. While several public assets such as highways, ports, railways, pipelines, and power lines are operational and revenue-generating, their potential economic value has not been fully realised.
Recognising this, the Government introduced the National Monetisation Pipeline as a structured programme to monetise these brownfield assets—meaning existing, operational assets rather than new ones—to generate funds for new infrastructure creation under the National Infrastructure Pipeline (NIP).
The NMP was prepared by the NITI Aayog in collaboration with the Department of Economic Affairs (DEA) and various sectoral ministries. The plan covers the period FY 2021–22 to FY 2024–25.

Objectives of the NMP

The primary goals of the National Monetisation Pipeline include:

• Unlocking value from underutilised or revenue-generating public assets.
• Mobilising private capital into infrastructure sectors to improve efficiency and service delivery.
• Creating a pipeline of investable assets to attract domestic and international investors.
• Recycling capital: The proceeds from monetisation are intended to fund new infrastructure projects, reducing dependence on public borrowing.
• Enhancing economic productivity by ensuring better utilisation of existing infrastructure.

Concept of Asset Monetisation

Asset monetisation involves transferring revenue rights (not ownership) of public assets to private investors or concessionaires for a fixed period in exchange for upfront or periodic payments. It is distinct from asset sale or privatisation. The ownership of assets remains with the government or public authority, while the private entity manages, operates, and maintains the asset under a contractual arrangement.
Typical models used for asset monetisation include:

• Toll-Operate-Transfer (TOT) model for roads.
• Public-Private Partnership (PPP) structures such as O&M (Operation and Maintenance) concessions.
• Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) for pooling investments.
• Long-term leases or rights transfers in exchange for capital or revenue-sharing arrangements.

Scale and Scope of the Programme

The NMP identified brownfield assets worth ₹6 lakh crore (approximately USD 81 billion) for monetisation between FY 2021–22 and FY 2024–25. These assets are spread across 20 ministries and 12 major sectors.
Key sectors and indicative monetisation value include:

• Roads: ₹1.6 lakh crore — through NHAI’s toll roads and highway stretches under the TOT model.
• Railways: ₹1.5 lakh crore — including stations, freight terminals, and railway colonies.
• Power: ₹85,000 crore — transmission lines, hydro projects, and renewable energy assets.
• Oil and Gas Pipelines: ₹57,000 crore — through monetisation of GAIL, IOCL, and HPCL pipeline networks.
• Telecommunications: ₹35,000 crore — telecom towers, optic fibre networks, and spectrum assets.
• Mining, Ports, and Airports: Combined value of over ₹60,000 crore — including major port terminals, airport leasing, and mining blocks.
• Urban Infrastructure: Redevelopment of government colonies, sports stadiums, and warehousing assets.

Implementation Framework

The NMP follows a three-tier institutional structure to ensure transparency and efficiency:

1. Core Group of Secretaries on Asset Monetisation (CGAM): The apex body headed by the Cabinet Secretary to coordinate and approve sectoral proposals.
2. NITI Aayog and Line Ministries: Responsible for identifying and preparing the pipeline of assets.
3. Asset Holding Ministries/Departments: Execute monetisation transactions through transparent bidding or InvITs.

The government emphasises public accountability through transparent bidding processes, standardised documentation, and clear contractual frameworks to attract credible investors.

Models of Monetisation

The NMP utilises multiple models to suit different sectors and asset types:

• Toll-Operate-Transfer (TOT): Private concessionaires collect tolls on pre-constructed roads for a fixed term and pay the government upfront.
• Operate-Maintain-Transfer (OMT): Private players operate and maintain public assets and share revenues.
• Lease/Concession Models: Used in airports, ports, and railway stations.
• InvITs and REITs: Investment platforms where assets are pooled and investors receive returns through unit holdings.
• Hybrid Annuity Models: Combination of government and private funding for partially monetised assets.

Expected Outcomes and Benefits

The NMP is designed to create a multiplier effect across the economy by recycling existing capital into new infrastructure. Its potential outcomes include:

• Increased private investment in infrastructure sectors.
• Enhanced efficiency and productivity through professional management of public assets.
• Generation of non-tax revenues for the government.
• Boost to employment generation and regional development.
• Strengthening of India’s position as an attractive destination for global infrastructure investors.

Progress and Key Initiatives

Since its launch, several monetisation transactions have been successfully executed:

• NHAI’s Toll-Operate-Transfer (TOT) bundles and InvITs have raised thousands of crores in private investment.
• PowerGrid Corporation of India launched the PGInvIT, monetising transmission assets.
• GAIL and Indian Oil Corporation have initiated monetisation of gas pipeline assets.
• Airport Authority of India (AAI) leased major airports such as Lucknow, Ahmedabad, and Mangaluru to private operators under long-term concession agreements.

The government has also encouraged states to identify and monetise their own public assets through similar frameworks.

Challenges and Criticisms

While the NMP is a progressive policy, it faces several challenges:

• Investor Confidence: Uncertainty regarding regulatory policies and long-term revenue sharing may deter private participation.
• Asset Valuation: Accurate valuation of public assets is complex and critical to avoid underpricing or overpricing.
• Operational Risks: Transfer of management may lead to service quality issues if private operators prioritise profit over public interest.
• Political Opposition: Concerns have been raised that the programme may indirectly lead to privatisation of public assets.
• Capacity Constraints: Many ministries and departments lack technical expertise in structuring and monitoring monetisation contracts.

Safeguards and Government Assurances

The government has clarified that NMP is not privatisation, as ownership of assets remains with the public sector. The programme merely leases or transfers revenue rights for a fixed term, ensuring continued public control.
Safeguards include:

• Transparent and competitive bidding.
• Time-bound contracts with defined performance standards.
• Mandatory reinvestment of proceeds into new infrastructure.
• Regular performance audits by independent agencies.

Significance for India’s Infrastructure Growth

The National Monetisation Pipeline is integral to achieving the vision of “Atmanirbhar Bharat” (Self-Reliant India) and the government’s infrastructure expansion agenda. It aligns with the National Infrastructure Pipeline (NIP), which aims to invest over ₹111 lakh crore in new infrastructure by 2025.
By creating a robust ecosystem for asset recycling, the NMP bridges the gap between infrastructure demand and fiscal limitations. It symbolises a paradigm shift from asset creation to asset optimisation, ensuring that public investments yield maximum economic and social returns.