Policy Update
Ashutosh Gupta
Policy Overview
In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced India’s Asset Monetization Plan 2025-30, a strategic approach to leverage the existing public infrastructure assets and create non-tax revenue to reinvest in new infrastructure projects. This new initiative is based on the earlier National Monetization Pipeline (NMP) 2021-25, which plans to generate ₹10 lakh crore through monetizing these functioning brownfield assets across sectors, including Highways, Railways, Power, Telecom, and Aviation. This is also consistent with the government’s broader goal of fiscal discipline and sustainable infrastructure development.
The policy intends to enable greater efficiency, encourage private sector participation and elevate the standards of infrastructure development.
Inception and Background
This project builds upon the success of the first Asset Monetization Plan unveiled in FY 2021-22, which identified assets worth ₹6 lakh crore for monetization from 2021-22 to 2024-25. Interestingly, the first phase covered ₹2.3 lakh crore over the first two years and ₹1.56 lakh crore in 2023-24, with major contributions from the Ministry of Road Transport and Highways as well as the Ministry of Coal. It aims to unlock the value of government-owned assets to produce funds for new infrastructure developments.
Need and Objectives
The main goals of the Asset Monetization Plan 2025-30 are:
- Capital Generation: To harness resources by utilizing underused or non-essential public assets.
- Infrastructure Advancement: To reallocate the revenues into fresh infrastructure initiatives to foster economic development.
- Operational Efficiency: To improve the effectiveness and output of public resources by involving the private sector.
The strategy is scheduled to be executed over a five-year timeframe from 2025 to 2030. The government is anticipated to define specific yearly targets and milestones to guarantee organized advancement and oversight.
The plan aims to benefit – the general public, with better amenities and infrastructure, resulting in a higher standard of living; the Private Sector, with prospects for investment and management of revenue-generating assets, promoting public-private collaborations ; lastly the Government, by boosting income without imposing further taxes, allowing for financial restraint.
Recent Developments
In January 2025, reports suggested that the Government may reduce its disinvestment and asset monetization target by as much as 40% for the FY 2024-25, to below ₹30,000 crore from the initial plan of ₹50,000 crore. The new status is a response to challenges in the divestment of government-owned enterprises and a strategic pivot towards asset monetization.
Additionally, the government has postponed the privatization of a minimum of nine state-owned enterprises and intends to allocate between $230 million and $350 million to rejuvenate underperforming state-operated companies, reflecting a sophisticated strategy for asset management.
Fig 2- NMP 2.0 Targets For FY 26 – FY 30
Source – Business Standard
Functioning
The plan includes renting current public infrastructure assets to private sector companies for a specified duration. In exchange, the government obtains initial payments or a revenue-sharing agreement, which is subsequently reinvested into creating new infrastructure. This method emphasizes brownfield assets—existing assets that have opportunities for enhanced use—spanning areas like roads, railroads, airports, and power transmission. The government maintains ownership, guaranteeing that assets return to public control following the lease period. Different tools, such as Public-Private Partnerships (PPPs) and Infrastructure Investment Trusts (InvITs), enable this monetization process.
Evaluation of Implementation
The execution of the Asset Monetization Plan has produced varied outcomes. By October 2024, the initiative had produced ₹3.9 trillion within the first three years, coming close to its revised goals. Significantly, the Ministry of Coal surpassed predictions by generating ₹1.54 trillion, far above a four-year goal of ₹80,000 crore. Nonetheless, other sectors fell behind; for example, the Ministry of Railways generated only ₹20,417 crore in three years, reaching only 30% of its adjusted goal.
Performance Evaluation (FY 2021-22 to FY 2023-24)
The National Monetisation Pipeline (NMP) launched in August 2021 aims to monetise government-owned infrastructure assets through private sector participation, generating resources for new infrastructure projects. The NMP outlines a plan to monetise ₹6 lakh crore of assets in the next four years, or during FY 2021-22 to FY 2024-25.
Fig 3- National Monetisation Pipeline (NMP) for FY 2022-2025
Source- Press Information Bureau (PIB)
In the last three fiscal years, the NMP has shown significant advancement:
Cumulative Achievement: By the conclusion of FY 2023-24, assets valued at around ₹3.85 lakh crore have been monetized, reaching roughly 64% of the total four-year objective.
Yearly Segmentation:
FY 2021-22 & 2022-23: Total monetization of around ₹2.30 lakh crore as against ₹2.5 lakh crore target (achieved 92% of the target).
FY 2023-24: Total receipts of about ₹1.56 lakh crore versus a FY target of ₹1.8 lakh crore, almost 87% of target receipts of the year.
Sectoral Performance:
Sector-wise performance has been mixed, with some outperforming and others struggling to overcome problems:
Leading Ministries in Performance:
- Ministry of Road Transport and Highways: Monetised assets worth ₹40,314 crore in FY 2023-24
- Ministry of Coal: Monetization earnings of ₹56,794 crore during that time frame.
Additional Significant Ministries:
- Ministry of Power: ₹14,690 crores.
- Ministry of Mines: ₹4,090 crores.
- Ministry of Petroleum and Natural Gas: ₹9,587 crores.
- Ministry of Urban Development: ₹6,480 crores.
- Ministry of Shipping: ₹7,627 crore.
Fig 4- Sector-wise Performance for the NMP
Source – NITI Aayog
Image Credit – Business Standard
Impact Assessment
1. Economic Development:
- Infrastructure Push: The ₹10 lakh crore reinvestment is expected to aid infrastructure push, enhancing connectivity and efficiency across the country. This aligns with the government’s target of a $5 trillion economy.
- Job Creation: Enhanced infrastructure projects are likely to create millions of new jobs directly related to construction as well as indirectly through allied industries.
2. Participation of the Private Sector:
- Enhanced Investment: The strategy promotes private sector involvement in infrastructure development, which could result in greater investment and expertise in public initiatives.
- Public-Private Partnerships (PPPs): Ministries focused on infrastructure are preparing a 3-year project pipeline in PPP format, encouraging teamwork between the public and private sectors.
3. Revenue Mobilization:
Asset monetization functions as a source of revenue that does not create debt, supporting fiscal consolidation initiatives without raising the fiscal deficit.
Emerging Issues
- Asymmetrical Performance: There has been a lack of uniform performance throughout the various sectors with severe under performance from the Ministry of Railways that met only 30% of its revised goals, resulting in an undulating pressure on other sectors to make up for this.
- Challenges in Asset Valuation: Assessing the fair market worth of various assets is intricate, which may result in undervaluation or overvaluation.
- Regulatory and Policy Challenges: Prolonged approval procedures and varying regulations among sectors may postpone transactions.
- Participation of the Private Sector: Capturing private investment demands transparent revenue frameworks and strategies for risk reduction.
- Public Opinion and Political Opposition: Concern over the privatization of public assets could result in public opposition and political hurdles.
- Capacity Constraints: Government agencies might not have the necessary skills to oversee intricate monetization procedures.
- Market Circumstances: Economic recessions or poor market environments may influence investor enthusiasm and valuations.
- Oversight and Responsibility: Guaranteeing that the revenue produced is properly reinvested into infrastructure initiatives necessitates strong supervision.
Way Forward
- Improved Transparency: Setting transparent rules and publicly accessible information fosters trust among stakeholders
- Stakeholder Collaboration: Promoting involvement from the government, the private sector, and civil society to support inclusive decision-making.
- Continuous Evaluation: Regularly assessing the impact of monetization measures and adjusting approaches based on feedback and performance metrics.
- Capacity Building: This includes training efforts to help government officials manage and execute monetization approaches.
- Policy Coherence: Ensuring a consistent policy framework to instill confidence in investors and guaranteeing the sustainability of monetization efforts.
Conclusion
The Asset Monetization Strategy 2025-30 is a crucial effort intended to unlock the value of underused public assets and direct the revenue into infrastructure enhancement. Aiming for ₹10 lakh crore, it is expected to strengthen economic growth, create jobs and attract private investment. However, challenges including asset valuation problems, regulatory delays and market uncertainties persist. The success of the policy relies on smooth implementation, simplified regulations, and robust investor trust.
While the plan has seen some moderate success in recent years, it will need continuous evaluation and calibration to address new threats. Monetization will need to be optimized through transparent governance, collaboration with stakeholders, and consistent policies. If the initiative is robustly implemented, it could significantly assist India’s ambition of $5 trillion economy by raising standards in its infrastructure and providing economic stability, thus making it a game-changing measure towards a sustainable economy.
References
1. Business Standard. (2024, June 19). Centre monetised ₹3.85 trillion worth of assets as part of NMP since FY22. Retrieved from https://www.business-standard.com/economy/news/centre-monetised-rs-3-85-trn-worth-of-assets-as-part-of-nmp-since-fy22-124061901156_1.html
2. Economic Times. (2024). Assets worth ₹1.56 lakh crore monetised in 2023-24 as against the target of ₹1.8 lakh crore under NMP: NITI Aayog. Retrieved from https://m.economictimes.com/news/economy/finance/assets-worth-rs-1-56-lakh-crore-monetised-in-2023-24-as-against-the-target-of-rs-1-8-lakh-crore-under-nmp-niti-aayog/articleshow/111118652.cms
3. Financial Express. (2024). Economy: Asset Monetisation Scheme 2.0 on the cards. Retrieved from https://www.financialexpress.com/policy/economy-asset-monetisation-scheme-2-0-on-the-cards-3721725/
4. Government of India. (2025). Union Budget 2025-26 Speech. Ministry of Finance. Retrieved from https://www.indiabudget.gov.in/doc/budget_speech.pdf
5. Ministry of Finance. (2024). National Monetisation Pipeline: Yearly Review Report. Retrieved from https://www.indiabudget.gov.in/
6. NITI Aayog. (2024). National Monetisation Pipeline Dashboard. Retrieved from https://pib.gov.in/PressReleasePage.aspx?PRID=2026675
7. NITI Aayog. (2025). Asset Monetization Plan 2025-30: Implementation Strategy. Retrieved from https://www.niti.gov.in/
8. PIB India. (2024). Government Monetisation Updates. Retrieved from https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2026675
9. Reuters. (2025, January 27). India to ditch privatization plans, pour billions into state-run firms, sources say. Retrieved from https://www.reuters.com/world/india/india-ditch-privatisation-plans-pour-billions-state-run-firms-sources-say-2025-01-27/
10. Times of India. (2025). Union Budget 2025: Centre unveils second asset monetization plan worth ₹10 lakh crore for 2025-30. Retrieved from https://timesofindia.indiatimes.com/business/india-business/union-budget-2025-centre-unveils-second-asset-monetization-plan-worth-rs-10-lakh-crore-for-2025-30/articleshow/117826080.cms
11. Vikaspedia. (2024). National Monetisation Pipeline Overview. Retrieved from https://en.vikaspedia.in/viewcontent/news/news-archives/national-monetisation-pipeline?lgn=en
12. Department of Public Enterprises (DPE). (2024). National Land Monetization Corporation (NLMC) Overview. Retrieved from https://dpe.gov.in/en/nlmc/about-us/nlmc-overview
About the Contributor: Ashutosh Gupta is a Research Intern at IMPRI. He is pursuing his Master’s Programme in International Relations and Area Studies from MMAJ Academy of International Studies at Jamia Millia Islamia University (JMI).
Acknowledgement: The author extends his sincere gratitude to the IMPRI team and Ms. Aasthaba Jadeja for her invaluable guidance throughout the process.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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