The government is poised to increase its target for the monetization of existing assets in the current fiscal year to an unprecedented Rs 2 trillion in 2024-25, up from the original aim of Rs 1.67 trillion. This move is expected to alleviate the strain on budgetary resources for infrastructure and welfare initiatives over the medium term.
Under the National Monetisation Pipeline (NMP), the government had set an ambitious target of Rs 6 trillion for asset recycling over the four years leading up to FY25. This would involve the long-term leasing of operational assets in various sectors such as roads, mining, power, petroleum, and airports. A senior official stated, “After substantial progress in the asset monetization program over the last three years and with a robust pipeline in place, we are targeting close to Rs 2 trillion in the current financial year.”
Following the general elections, government ministries have been briefed on their respective targets, and a revised plan is expected to be finalized shortly, the official added. Despite significant underperformance in the railways sector compared to its proportionate share in overall asset monetization, the NMP has achieved Rs 3.85 trillion, which is 90% of the Rs 4.3 trillion targeted in the first three years, through upfront revenues, revenue sharing from operations, and capital expenditure from private entities.
The monetization of coal and other mining assets is projected to yield over Rs 61,000 crore in FY25, surpassing the original target of Rs 10,600 crore. The mining sector has delivered upfront revenues and capital expenditure amounting to Rs 58,000 crore in FY22, Rs 60,000 crore in FY23, and Rs 60,884 crore in FY24. “In the coal and other mining sectors, we anticipate surpassing the achievements of FY24, which were somewhat affected by the model code of conduct during the general elections,” said another official.
The National Highways Authority of India (NHAI) is expected to continue its robust monetization efforts, with 33 highway stretches covering a total length of 2,741 km across India earmarked for monetization in 2024-25. NHAI could potentially raise Rs 54,000-60,000 crore from the monetization of functional road assets through InVIT and Toll Operate Transfer routes, as well as project-based financing, marking its highest ever annual achievement. In FY24, it raised Rs 40,314 crore.
Furthermore, several airports, including Bhubaneswar, Varanasi, Amritsar, Raipur, Indore, and Trichy, are likely to be leased out for operation, management, and development under public-private partnerships in FY25. In addition, asset recycling in power transmission, power generation, natural gas exploration, and port infrastructure is expected to perform well in FY25, according to sources.
The NMP’s objective was to mobilize resources equivalent to 5.4% of the total infrastructure investment envisaged under the National Infrastructure Pipeline (NIP), which amounts to Rs 111 trillion, and approximately 14% of the proposed outlay for the Centre (Rs 43 trillion) over the five years leading up to FY25. This innovative approach represents a first-of-its-kind effort to streamline asset monetization as a means to generate resources for sustainable infrastructure investment.