Maarg Manthan · Topic 11.8

National Monetisation Pipeline

Current Affairs & Government Schemes › Infrastructure and Connectivity Schemes · Topic 11.8

The National Monetisation Pipeline is a plan to raise money by leasing out operating public infrastructure assets to private players for a fixed period, while ownership stays with the government. It was launched by Finance Minister Nirmala Sitharaman on 23 August 2021, prepared by NITI Aayog, with a target of Rs 6 lakh crore over four years from 2021 to 2022 to 2024 to 2025. A second phase, NMP 2.0, was launched in February 2026 with a target of about Rs 16.72 lakh crore over 2025 to 2026 to 2029 to 2030, as reported. The aim is to recycle capital into new projects.

6 min read · UPSC Prelims · Current Affairs & Government Schemes · Infrastructure and Connectivity Schemes

At a Glance

Launched 23 August 2021
Prepared by NITI Aayog
NMP 1.0 target Rs 6 lakh crore, FY 2022 to FY 2025
NMP 2.0 Launched February 2026, about Rs 16.72 lakh crore
Type of assets Brownfield, operating assets
Exam link UPSC Prelims, Current Affairs and Government Schemes: Infrastructure and Connectivity Schemes

Where Does It Fit?

This topic covers a financing tool in the macro on infrastructure and connectivity. It supplies money to build the new projects that other topics describe, by recycling value from assets that already work. Previous topic: National Rail Plan and Dedicated Freight Corridors. Next topic: National Bank for Financing Infrastructure and Development (NaBFID).

What Is the National Monetisation Pipeline?

Feature	Details
Launch	23 August 2021 by the Finance Minister, with a plan prepared by NITI Aayog
Principle	Lease operating assets for a fixed term to a private operator, get an upfront payment or a revenue share, and take the asset back at the end
NMP 1.0 target	Rs 6 lakh crore over four years from FY 2022 to FY 2025 across 20 asset classes in 12 line ministries
Largest contributors	Roads, railways and power transmission were the biggest shares, followed by telecom, gas pipelines, warehousing and mining
Outcome of NMP 1.0	The Government reported that a large share of the target was reached, in the range of about Rs 5.3 to 5.9 lakh crore depending on the measure. Treat the exact number as reported
NMP 2.0	Launched in February 2026 with a target of about Rs 16.72 lakh crore for FY 2026 to FY 2030, of which a part is expected from private investment

What Models Are Used for Monetisation?

Brownfield assets: only operating assets are monetised, and no new asset is built under this plan
Toll operate transfer: a private firm collects tolls on a finished road for a fixed period and pays an upfront sum, as in bharatmala-pariyojana-roads/" class="maargx-auto-link" data-preview="At a Glance Approved 24 October 2017 Ministry Road Transport and Highways Phase I length About 34,800 km Phase I outlay About…">Bharatmala Pariyojana (Roads)
Infrastructure Investment Trusts: InvITs pool operating assets and sell units to investors, with the road and power transmission sectors using them widely
Operation maintenance and development: a private operator runs and improves an asset, such as a railway station or an airport, and pays the owner
Leases: leasing of land, warehouses, stadiums and port terminals for a long period
Real Estate Investment Trusts: REITs are used to monetise commercial buildings and colonies
Asset recycling: the money raised is used to build new infrastructure, so that the same capital is used again and again
Ownership: the government keeps ownership, and assets come back after the term, which separates monetisation from privatisation

What Else Should You Remember?

Difference from disinvestment: disinvestment sells government equity in a company, while monetisation leases the use of an asset for a time
Difference from privatisation: in privatisation ownership passes to a private owner, but in monetisation the asset reverts to the government
Governance: a Core Group of Secretaries under the Cabinet Secretary reviews progress, and the Department of Economic Affairs runs a monitoring dashboard
Asset classes in NMP 1.0: roads, railways, power transmission and generation, gas and product pipelines, telecom towers and fibre, warehousing, mining, airports, ports, stadiums and urban real estate
Railways: the railway share included stations, passenger trains, freight terminals and the Dedicated Freight Corridors, as in National Rail Plan and Dedicated Freight Corridors
NMP 2.0 sectors: roads and highways take the largest share at about a quarter of the target, followed by power, railways, ports, coal and mining, as reported
Investor base: pension funds, insurance companies and sovereign funds are the target investors for long term assets, because they want stable income
Link with NIP: the pipeline of projects to build and the pipeline of assets to monetise are two halves of one financing plan, as in National Infrastructure Pipeline (NIP)
Criticism of valuation: critics argue that assets may be leased too cheaply, and that the process lacks transparency in pricing
Criticism of monopolies: concern exists that a few large business groups gain control of key assets such as ports, airports and roads
Labour and users: workers worry about job security, and users fear higher tolls and tariffs after private operation begins
Fiscal reality: the upfront money is a one time gain, and the government loses the future income stream, so the plan helps financing only if the funds go to new capital spending

Why Does It Matter for the Exam?

Basics: launch date, agency, the Rs 6 lakh crore target and period
Concept: the difference between monetisation, disinvestment and privatisation
Models: InvIT, toll operate transfer and operation maintenance and development
Phase two: NMP 2.0 launched in February 2026 and its target
Common errors: calling it privatisation, or saying that new assets are built under it

As an analytical point, asset monetisation is a sound way to fund new projects if pricing is transparent and regulators protect users. Without clear rules on tariff, the plan can transfer public monopolies to private hands. Independent valuation and open bidding improve trust.

Why Is This Topic Important?

Concept Lease not sale
Targets Rs 6 lakh crore and NMP 2.0
Models InvIT, TOT, OMD

What Came Next?

The next topic covers the development finance institution that lends for infrastructure. Next topic: National Bank for Financing Infrastructure and Development (NaBFID).

Key People and Terms

Monetisation Earning money from an asset without selling it
Brownfield Asset that already operates
Greenfield New asset yet to be built
InvIT Trust that holds infrastructure assets
TOT Toll operate transfer
Asset recycling Reusing proceeds for new assets

Exam Corner

Points to Remember

Launched 23 August 2021 by NITI Aayog plan.
Target: Rs 6 lakh crore in four years.
NMP 2.0: about Rs 16.72 lakh crore to FY 2030.
Brownfield assets only.
Ownership stays with the government.

Do Not Confuse With

Monetisation and privatisation Lease for a term versus permanent change of ownership
Monetisation and disinvestment Asset use versus company equity
NMP and NIP Assets to lease versus projects to build

Memory Hook

Lease it, earn it, build anew; the asset comes home.

Mains Angle

Questions ask whether monetisation is a good funding method. These points give a balanced frame.

Benefits Funds for new projects, better operation
Concerns Valuation, monopoly, user cost
Way forward Transparency, regulators, safeguards

A Question You May Face

An original practice question, not a past paper question.

“Examine the rationale for the National Monetisation Pipeline and the concerns it raises.”

How to Answer

Idea Lease operating assets.
Use Fund new projects.
Risk Pricing, monopoly, users.
Way Transparency and regulators.

GS Relevance

Prelims: launch, agency, target, models, difference from disinvestment. GS Paper 3: infrastructure financing, public sector assets, resource mobilisation.

Frequently Asked Questions

What is the National Monetisation Pipeline?

The National Monetisation Pipeline is a plan launched on 23 August 2021, prepared by NITI Aayog, to lease operating public infrastructure assets to private operators for a fixed term. The government keeps ownership and uses the proceeds to build new infrastructure, which is often called asset recycling.

What was the target of NMP 1.0?

NMP 1.0 set a target of Rs 6 lakh crore over four years from FY 2022 to FY 2025, across about 20 asset classes in 12 line ministries. The Government reported that most of the target was achieved, though the exact figure differs among official and media sources, so it should be read as reported.

What is NMP 2.0?

NMP 2.0 is the second phase, launched in February 2026, with a reported target of about Rs 16.72 lakh crore over five years to FY 2030. It covers around 12 sectors, with highways forming the largest share, and it expects a significant part to come from private investment.

How is monetisation different from privatisation?

In monetisation the government leases the right to use or operate an asset for a fixed period, and the asset returns to the government at the end of the term. In privatisation ownership passes to a private owner for good, so the two should not be confused in examination answers.

What are the main criticisms of the National Monetisation Pipeline?

Critics raise concerns about low or opaque valuation of assets, the concentration of key assets such as ports and airports with a few large groups, higher user charges and tolls, and job security for workers. They also note that upfront money is one time while the government loses future income.

PYQ Practice — Statement Analysis

1 The National Monetisation Pipeline was launched in 2021.

True

The launch was on 23 August 2021.

2 Under the NMP, ownership of assets passes permanently to private firms.

False

Assets revert to the government after the term.

3 NMP covers brownfield assets.