NMP 2.0 for FY26-30 launched: Govt aims ₹16.7 trn from asset monetisation

Private investment of Rs 5.8 trillion also included in the target

Finance Minister Nirmala Sitharaman on Monday unveiled the second phase of the National Mon­e- ­t­isation Pipeline (NMP 2.0), valued at ₹16.72 trillion, to plough back capital from assets of central ministries and public-sector entities between FY26 and FY30.

The FM said the NMP enables the recycling of productive public assets, thereby unlocking resou­rces for reinvestment in new projects and capital expenditure. She noted that this approach facilitates the efficient mobilisation of funds for capex in public assets while minimising the government’s budgetary outgo. 

 

Dominated by highways, power, ports, and railway projects, NMP 2.0 will bring private participation in over 2,000 assets across public enterprises at the Centre and in the states, B V R Subrahmanyam, chief executive officer of NITI Aayog, said at a media interaction on Monday.

 

 

For the first time, the NMP 2.0 estimate includes private investment of ₹5.8 trillion over five years, the Aayog said. This head will record private-sector investment in monetisation projects that involve construction and/or major maintenance components.

 

It is estimated that the largest portion of the proceeds under NMP 2.0 will accrue to the Consolidated Fund of India (43 per cent), followed by direct private investment (39 per cent), PSU or Port Authority allocation (15 per cent), and the State Consolidated Fund (4 per cent).

 

In the second edition, asset monetisation comprises elements such as the transfer of assets for a limited period, divestment of portions of listed entities to unlock additional capital, securitisation of cash flows, or strategic commercial auctions.

 

The ₹16.72 trillion target includes cash flows accruing to government entities in terms of upfront proceeds, the present value of expected future cash flows from asset monetisation, and estimated private investment in the projects. These assets will generate ₹10.8 trillion in FY26-30, while ₹5.9 trillion will accrue in subsequent years, taking cognisance of longer concession cycles and the continuation of returns beyond the five-year monetisation window.

 

The government has set a target of ₹2.49 trillion from asset monetisation proceeds in FY26, of which it is likely to achieve ₹2 trillion, NITI Aayog said.

 

Highway monetisation will account for over a fourth of the second pipeline, along with major contributions from sectors that performed well in the previous cycle, such as ports, coal, and mines.

 

The railways, despite achieving only 29 per cent of their targets in the first NMP, have been given a target of ₹2.62 trillion in NMP 2.0. Notably, this includes an ₹83,700 crore target for the dilution of government equity in seven listed railway PSUs.

 

The assets and transactions identified under NMP 2.0 are expected to be rolled out through a range of instruments, including direct contractual instruments, such as public-private partnership concessions, and capital market instruments, such as Infrastructure Investment Trusts (InvITs), among others. NITI Aayog said the choice of instrument would be determined by the sector, nature of the asset, timing of transactions (including market considerations), target investor profile, and the level of operational or investment control to be retained by the asset owner.

 

The government has undertaken a detailed analysis of asset monetisation under the first pipeline and has developed a new methodology to identify proceeds with respect to depreciation during the monetisation period.

 

“In the past, there has been underperformance against targets in railways, aviation, and telecom. In NMP 2.0, significant targets have been set for these three sectors. The government will need to introduce a strict policy of incentives and disincentives to ensure that these sectors meet their targets,” said Kuljit Singh, partner and infrastructure leader at EY India.

 

Kushal Kumar Singh, partner at Deloitte India, said the current regulatory environment is conducive, but achieving the targets will depend on inward foreign direct investment (FDI), as domestic investors alone have limited appetite. “This will also depend on how stable the rupee is going forward, as an unstable rupee may not get FDI at the benchmark that the government has on returns from projects. Another important aspect will be the ability to pool in public funds, for which a multi-sectoral infrastructure investment trust could be useful,” he said.