As part of its asset monetisation push, the government has launched the second phase of the National Monetisation Pipeline (NMP 2.0), with a target of Rs 16.7 trillion between FY26 and FY30 from operating public assets. This is not an outright sale. The state plans to lease assets, securitise cash flows, and dilute equity in public sector companies to unlock capital for fresh infrastructure investment.
Most identified assets are in highways, power, ports, railways, coal, and mines. Private firms will operate or manage these assets for fixed periods under PPP models, or invest through structures such as infrastructure investment trusts. The government is also considering stake dilution in listed railway public sector undertakings.
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NMP 2.0 builds on the first pipeline, which targeted Rs 6 lakh crore for FY22-FY25. The government says it mobilised about Rs 5.3 lakh crore, or roughly 89% of the target. Coal was the standout sector, exceeding its target.
In public finance, the issue is not whether the state should own infrastructure. It is what the state does with assets after they are built. Highways generate tolls. Ports handle cargo. Transmission lines produce predictable revenue streams. Yet much of this value remains locked on public balance sheets unless it is leased, securitised, or monetised through equity dilution. Asset monetisation is not a sale of strategic control. It is a financing choice.
NITI Aayog has positioned NMP 2.0 as a structured multi-year roadmap to unlock value from core infrastructure sectors.
NMP 2.0 target: what the Rs 16.7 trillion actually means
The headline number combines different kinds of value, and that matters.
The first component is upfront proceeds to the Consolidated Fund of India. Official estimates indicate that about 43% of the pipeline value will accrue directly to the Centre. These proceeds come from concession fees paid by private operators for long-term rights to operate and maintain assets such as highways under toll-operate-transfer models, transmission assets under tariff-based bidding, or port terminals under commercial concessions. Ownership remains with the public authority. Operational control is transferred for a defined period.
The second component is direct private investment, which accounts for roughly 39% of the headline number. This is often read as government revenue, but it is not. It includes capital expenditure by private concessionaires on upgrades, maintenance, and expansion committed under monetisation contracts. In sectors such as railways and airports, the transaction may include both operational rights and mandatory capex. That capex is counted in the total economic value of the pipeline.
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A further 15% is expected to accrue to public sector undertakings and port authorities, while 4% is projected to flow to state consolidated funds. This is not a purely central exercise. Assets across ports, coal, power, rail-linked entities, and telecom infrastructure sit under different ownership structures, so proceeds will be distributed across institutions.
The target also includes the present value of future cash flows and embedded private investment, not just immediate receipts. Of the Rs 16.7 trillion, about Rs 10.8 trillion is expected in FY26-FY30, while Rs 5.9 trillion is projected to accrue later because concession cycles run longer. In other words, the headline figure is a valuation measure, not a cash receipt schedule. Annual cash inflows will be much smaller.
None of this will convert into realised value unless the contracts are credible. Long-duration monetisation depends on concession design, tariff clarity, traffic and demand assumptions, change-in-law treatment, and the speed at which disputes are resolved. Investors will discount aggressively if they expect regulatory reversals, delayed approvals, or litigation. NMP 2.0 is therefore not only a pipeline of assets. It is a test of the state’s ability to write bankable contracts and enforce them consistently across sectors.
Highways, coal and ports lead the monetisation pipeline
Highways account for more than a fourth of NMP 2.0. The National Highways Authority of India has, over the past few years, refined toll-operate-transfer and InvIT-based models and attracted pension funds and long-horizon infrastructure investors seeking stable yields.
The new pipeline also leans on sectors that performed relatively well in the first phase, especially ports, coal, and mining.
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Railway PSU stake dilution is the difficult test
Railways remain the difficult leg of the programme. The sector achieved only 29% of its target in the first NMP, yet it has been assigned a Rs 2.62 trillion goal under NMP 2.0. The government is planning stake dilution in seven listed railway public sector undertakings.
This route is fiscally attractive. When the state dilutes equity in profitable listed PSUs through market offerings, it can unlock capital without surrendering majority control. But this is not the same as operational monetisation of brownfield infrastructure. It depends on market conditions, investor appetite, valuations, and the credibility of the PSU investment story. Treating stake sales as a routine substitute for harder monetisation reforms in rail operations will weaken the pipeline’s discipline.
Asset monetisation works if proceeds are redeployed well
Asset monetisation is not free money. Upfront receipts are the discounted value of earnings the state would otherwise receive over time. The case for monetisation rests on comparative returns. If the government redeploys this capital into projects with higher social and economic returns than the foregone cash flows, the transaction creates value. If it does not, monetisation becomes a short-term fiscal bridge.
Nor does monetisation reduce public debt by itself. The fiscal outcome depends on how proceeds are used: whether to retire liabilities, create fiscal headroom, or sustain capital expenditure.
The government has argued that the objective is to maintain a high public capex trajectory and crowd in private investment. NMP 2.0 will be judged less by the size of its headline target than by the quality of execution and redeployment.