National Monetisation Pipeline 2.0: Infrastructure Asset Recycling at Scale
Finance Minister Nirmala Sitharaman launched the National Monetisation Pipeline 2.0 (NMP 2.0) on February 24, 2026, with a monetisation target of ₹16.72 lakh crore over FY2026–2030
NMP 2.0 was developed by NITI Aayog in consultation with infrastructure line ministries, pursuant to the mandate announced in Union Budget 2025–26
The pipeline covers 12 sectors: highways (including multimodal logistics parks and ropeways), railways, power, petroleum and natural gas, civil aviation, ports, warehousing and storage, urban infrastructure, coal, mines, telecom, and tourism
The target includes ₹5.8 lakh crore in direct private investment under the monetisation mechanism; the overall ₹16.72 lakh crore figure encompasses proceeds flowing into government funds and private investment combined
NMP 2.0's five-year target is 2.6 times higher than NMP 1.0's ₹6 lakh crore target; the predecessor achieved ₹5.3 lakh crore — roughly 89% of its goal
Asset Monetisation: Concept and Mechanism
Asset monetisation is the process by which public agencies (central government, CPSEs) lease brownfield infrastructure assets to private operators for a defined period in exchange for upfront proceeds, while retaining ownership. The model is distinct from privatisation: the government does not sell the asset but grants operational rights temporarily. After the concession period, the asset returns to public ownership.
NMP 2.0 represents a major scale-up of this model to fund India's infrastructure investment cycle — proceeds from monetising existing assets are recycled into new greenfield infrastructure, reducing the fiscal burden.
Infrastructure Investment Trusts (InvITs) and REITs
InvITs and REITs are SEBI-regulated pooled investment vehicles that allow infrastructure assets and real estate to be listed on exchanges, enabling retail and institutional investors to participate in infrastructure ownership. InvITs pool income-generating infrastructure assets (highways, power transmission lines, pipelines) and distribute at least 90% of distributable cash flows as dividends to unitholders.
InvITs are a central instrument for NMP 2.0, particularly for highways, power, and railway assets — they allow monetisation without full privatisation while deepening India's capital markets.
NITI Aayog's Role in Infrastructure Planning
NITI Aayog (National Institution for Transforming India), established in January 2015 replacing the Planning Commission, serves as the government's premier think tank. Unlike the Planning Commission, NITI Aayog does not allocate funds but provides strategic and technical advisory support, including designing monetisation frameworks.
Key Details
- Planning Commission was dissolved on January 1, 2015; NITI Aayog notified January 1, 2015
- NITI Aayog developed NMP 1.0 (2021) and now NMP 2.0 (2026) — but implementation rests with respective line ministries
- NMP 2.0 was mandated in Union Budget 2025–26 as "Asset Monetisation Plan 2025–30"
- NITI Aayog's composition: PM as Chairperson, full-time Vice-Chairperson, CEO, and members
- Unlike Finance Commission (constitutional body under Article 280), NITI Aayog is an executive body with no statutory backing
NITI Aayog developed NMP 2.0 in consultation with infrastructure line ministries, reflecting its advisory and coordination role rather than a command-and-control planning function.
Public-Private Partnership (PPP) in Infrastructure
PPP is a cooperative arrangement between a government entity and a private sector company for financing, constructing, and/or operating infrastructure projects. India has a well-defined PPP framework encompassing multiple models: Build-Operate-Transfer (BOT), Build-Own-Operate-Transfer (BOOT), Toll-Operate-Transfer (TOT), Design-Build-Finance-Operate (DBFO), and Hybrid Annuity Model (HAM).
Key Details
- Viability Gap Funding (VGF) scheme (2006) — government provides upfront grant up to 20% (extendable to 40%) of project cost to make PPPs financially viable
- HAM (Hybrid Annuity Model) introduced for NHAI projects: 40% government grant upfront, 60% via annuity payments — reduces traffic risk for developers
- TOT model: private player pays upfront concession fee for right to collect tolls on already-operational highways for typically 30 years
- PPP approval: Projects above ₹1,000 crore require PPPAC (Public-Private Partnership Appraisal Committee) approval before implementation
NMP 2.0 relies heavily on TOT, InvIT, and other PPP structures to mobilise ₹16.72 lakh crore without transferring ownership of public assets.
- NMP 2.0 target: ₹16.72 lakh crore over FY2026–30 (5 years)
- NMP 1.0 target: ₹6 lakh crore over FY2022–25 (4 years); achieved ≈ ₹5.3 lakh crore (89%)
- NMP 2.0 is 2.6 times higher than NMP 1.0 target
- Private investment component within NMP 2.0: ₹5.8 lakh crore
- Top sectors by monetisation target: Highways ₹4.42 lakh crore, Power ₹2.76 lakh crore, Ports ₹2.63 lakh crore, Railways ₹2.62 lakh crore, Coal ₹2.16 lakh crore, Mines ₹1 lakh crore
- Nodal body: NITI Aayog (in consultation with line ministries)
- Mandate basis: Union Budget 2025–26 announcement of "Asset Monetisation Plan 2025–30"