National Monetisation Pipeline to raise Rs 6 lakh crore

On Monday, 23 August 2021, Finance minister Nirmala Sitharaman launched the National Monetisation Pipeline, which is now popular with the name “NMP”. With the help of the NMP government is aiming to leas out infrastructures assets of the central government ministers and the state-owned infrastructure assets over the next four years.

National Asset Monetisation Pipeline

What’s the plan of NMP?

According to the announcement by the ministry, the plan says, the government is intending to raise Rs. 88,000 Crore through asset monetization in the current circumstances(the amount to be a rise in the rest of the financial month of 2021-22), Rs 1.6 lakh crore in 2022-23, Rs. 1.8 lakh crore in 2023-24 and Rs. 1.6 lakh crore in 2024-25.

Financial yearAmount(in Rs. Trillion)
Total AmountRs. 6
Annual Target For NMP(in Rs. trillion)

We are talking about the National monetization Pipeline, in 2020 the government had launched the National infrastructure pipeline which was proceeds tobe finance the Rs. 110 crore. This two are absolutely different.

What is Asset monetization?

Asset monetization refers to utilizing the existing asset base and using the proceeds for the creation of the new infrastructure. In this, the government is trying to use the assets of India by leasing them.

Asset monetization can also be understood as the process of conversion of assets, in this case, contacts to builds highways, bridges, roads, etc, into economic value.

The chief executive of the Niti Aayog Amitabh Kant said that the objective of the government is to enhance CAPEX spending, resulting in a multiplier impact on growth and employment and reviving credit flow.

“The assets to be monetized are separated across 20 asset levels and 12 line ministries”, he added. Different criteria will be followed for monetization depending on the kind of the assets like operate, control and then transfer, or redevelop, operate, maintain, and then transfer.

What will be the asset?

By value, the top five sectors under the Government’s asset Monetization program are Railways for 25%, Roads for 27%, Power for 15%, Telecom for 6%, and gas pipeline for 8%.

What is happening?

The government is saying that we are not selling our assets to any private player, we are just leasing them. In this process, they will have to pay us a value to use it for a specific period of time. The ownership will be under the government always.

Let us assume that there is a land route from Delhi to Agra. The route is coming under the government. So the government will leas it to any private party for a value. And then the maintenance and resources will not come under government it will come under that private party.

So the question arises that why the private party will take that asset for a period of time without any ownership? They can make revenue by building and shops around. In this case of the route on the sides.

How much the amount will be ?

The government had provided an expected data of collection, we gain after the National monetization pipeline.

Criteria Expected amount(In Rs. crores )
Power Transmission45,200
Power Generation39,832
Natural Gas Pipeline24,462
Products pipeline/ others22,504
Urban Real states15,000
Total6 lakh Crore

Projects that will be given on Lease:

Among projects, the government plans to lease are 26,700 Km of roads, 90 passenger trains, 400 railway stations, 28,608 circuit Km transmission lines, 286,000 Km of Bharatnet fiber network, and 14,917 towers owned by state-run Bharat Sanchar Nigam Ltd and Mahanagar Telecom Nigam Ltd.

Other core infrastructure assets that will lease under NMP include airports in smaller cities, dedicated freight corridor assets, warehousing assets of state-run companies such as central warehousing corp, and NAFED, and sports stadiums.

TOT Model:

TOT stands for Tol operate transfer model. Under this model to adapt openly financed parkways, financial backers make a one-time single amount installment as a trade-off for cost assortment privileges of 15 to 30 years under this model. It additionally includes that openly subsidized activities that are functional for beyond what a year in the wake of starting business tasks can be adapted.

Finance minister Nirmala Sitharaman said the adaptation pipeline will be co-end with the Rs. 100 trillion public framework pipeline from this year. There will be no land sale happened under NMP. It talks about brownfield assets.


It would be significant for the government to get the initial not many activities in every area right to set the ball moving in the correct way.

In this way, the smooth execution of the initial 10,000 crores will decide the destiny of the 6 trillion adaptation plan.

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