“Investment in infrastructure is a long-term requirement for growth and a long-term factor that will make growth sustainable.” 

– Chanda Kocchar


The government of India on 23rd August 2021 launched the National Monetisation Pipeline (“NMP”) in consultation with NITI Aayog and secretaries of infrastructure ministries keeping in mind the mandate for asset monetisation under the Union Budget 2021-22. This pipeline of assets that the government shall monetise with the help of core assets has the potential to generate capital of 6 lakh crores from Financial Year (“FY”) 2022 to FY 2025.  

This serious decision about investment is to cater to infrastructure projects that are currently planned and to additionally create a firm foundation for future projects. In essence, there is now a sizable inventory of infrastructure assets that have been maintained for the past decade and can now be utilized to create capital for existing and fresh infrastructure projects that the country so very needs.  

India Ratings and Research (“Ind-Ra”) recently reported thatthe NMP will unlock capital through the monetisation of de-risked brownfield assets. The Ind-Ra is a respectable credit rating agency that specializes in contributing accurate and timely credit opinions. In its recent statement, it portrayed its faith in the NMP. The NMP is set to refocus the government on infrastructure spending and act as an impetus to raise capital for newer developments. As per recent data,approximately Rs 88,000 crores will be raised under this plan in the current financial year.

This new plan of action will be taken forward by identifying sectors to monetise that include, roads, ports, airports, railways, power generation and transmission, telecom, warehousing, gas and product pipeline, mining, stadium, hospitality and housing. 

However, to analyze the NMP and the change it will ignite, first, it is important to familiarize yourself with a few concepts/notions that are being talked about here. After that, we shall look into the vital aspects of the proposed model. 

Infrastructure Investment as a Facilitator of Growth 

Every great economy in the world has a strong and vigorous infrastructure system that has significantly boosted the economy to flourish. The infrastructure sector is essentially the driving force of any economy and same is the case with India. This sector encompasses major arenas like power, bridges, roads, dams and urban infrastructure development. Therefore, investment in infrastructure is paramount for accelerated and inclusive growth of the socio-economic aspects of our country. The Indian government has always been intensely focused on infrastructure through policies that are proposed to ensure the time-bound creation of top-notch infrastructure. 

Regardless of the importance of this sector, the question of investment is usually where things are stuck. Numerous projects are left unfinished and abandoned due to a lack of funding or financing backing. In order to bridge the gap between existing infrastructure projects and to build a sustainable future, India’s National Infrastructure Pipeline (“NIP”) foresees an infrastructure investment of INR 111 lakh crores within five years (FY 2020-2025). India is an emerging economy and financial options need to be accessed and evaluated from time to time to arrive at the most viable one. There is a need to look past the traditional way of doing business and enforce innovative mechanisms and models of financing. These business tools will benefit the projects and help utilise resources to their fullest capacity. 

While the initiative by the government to accelerate the growth of the economy is being well received, NIP also introduced asset monetisation for generating capital. Here is where the existing inventory of infrastructure assets that were built through public investments over the years can help tap private sector efficiencies. 

Asset Monetisation is the Right Way Forward 

Asset monetisation by its every nomenclature means “to convert something or express it into the form of currency.” There are public assets such as roads, airports, railways, pipelines, mobile towers, transmission lines, shipping terminal, land, buildings and financial assets that are controlled and managed by the government through Public Sector Undertakings (“PSUs”) among other departments of Central and State governments. These public assets are the resource hub for all evolving economies, including India.  

Asset monetisation or more commonly referred as asset or capital recycling is very common in business parlance. In essence, performing assets are transferred for a particular period to unlock the inactive capital and reinvest in other projects that can deliver profitable results within a fixed timeline. The whole process is carried out relying on well-defined methods and procedures.  

The framework for the monetisation will be primarily aiming at three imperatives; (i) The ‘rights’ and not the ‘ownership’ will be monetised suggesting assets that were handed back to the government at the end of its transaction life; (ii) less risky brownfield assets- profitable stability and (iii) frameworks laid down in order to execute structured partnerships under defined contractual roles. The primary ownership of the assets under these structures, hence, continues to be with the Government with the framework envisaging hand back of assets to the public authority at the end of transaction life. 

Another crucial aspect to comprehend here is that asset monetisation will offer public infrastructure to private players, however, at the epicentre of monetisation is the transition from privatization to structured partnerships that will act within contractual frameworks. The government is known to increase efficiency while getting private players involved whilst keeping in mind the challenges that come along with it. Given the current economic climate. long term investments and smarter solutions are the way forward.

This process meets two crucial goals – One, it shall free the value from public investment in infrastructure, and two, monetisation drives home the efficiencies of the private sector. Asset monetisation also helps in generating employment and meeting the ever-rising need for enhanced quality of public assets and services. 

There are broadly two ways in which asset monetisation can be undertaken. One is through Private-Public Partnerships (“PPP”) Concessions, which is a direct tool to achieve the purpose. The other way is through structured financing models namely, Infrastructure Investment Trust (“InvIT”), Real Estate Investment Trust (“REIT”), etc. Structured financial models are designed in such a way so as to mitigate serious risks related to complex assets; the primary goal being facilitating reliable financial solutions.

As public assets are operated primarily by the government, so adapting to the concept of asset monetisation shouldn’t be a problem, for the sake of the needs of the society which is always ever-increasing and ever-changing. 

NMP and its Relevance in the Status Quo 

For asset monetisation and the plan to effectuate, NMP is the much-required step in the right direction that will open the field for private players to enhance the operational capabilities of brownfield infrastructure assets. The government needs to have a strong pipeline of robust brownfield projects that are structured and ready to be utilized. This sustained pool of transactions and visibility on the same will ensure that long-term investors are acquired. Long-term investors will definitely appreciate the strong pipeline of assets as it becomes easy for them to keep a track of owners and evaluate the performance of the assets. Their skepticism to invest will turn to trust and build a long-lasting business relationship.   

This was the entire ideology behind introducing NIP in the Union Budget 2021-22 and the journey for world-class infrastructure emerged from it, leading to today’s NMP. The NMP is a common framework for the monetisation process that consists of two Volumes of Guidance Book for Asset Monetisation that includes a Medium-term Roadmap for pipeline of assets.  

Eventually, a system will be created that can act on a successful cycle of development, monetisation and investment. The NIP model and the NMP initiative are said to be conterminous to each other, albeit till the expiry of NIP in 2025. 

NMP and its Key Areas of Focus 

NMP is the result of information and knowledge provided by various stakeholders like line ministries and departments. The existing infrastructure also provides secondary information that can be very useful. NMP follows the approach of identifying and managing the existing asset base spread across various sectors.  

According to the latest update, the indicative value of NMP has been estimated at INR 6 lakh crores (INR 6000 billion) over its 4-year period. There are a few key sectors that will be prioritized like, roads (27%) followed by railways (25%) and power (15%). The monetisation of the roads, railways and power assets are likely to open up capital of INR 3,977 billion out of the entire estimated value. Ind-Ra is certain that the government’s key focus on assets is due to brownfield inventory, good budgetary allocation and workable monetisation tools. These factors jointly motivated the government to come up with this investment approach. If the NMP is implemented successfully it will unlock growth prospects and expansion that will have a virtuous positive effect on our economy. 

Challenges of the Innovative Investment Model 

As the African proverb goes, “Smooth seas do not make skillful sailors”, the implementation of NMP comes with its own tricks and challenges. To begin with, fair evaluation of assets, which is very important as the actual monetisation value will be determined based on detailed valuation or feasibility studies (as may be applicable) at the stage of transaction structuring. The assets offered for bidding must be of impeccable quality to ensure active and adequate participation of bidders. The bidders must also be competent to operate and develop the assets and all of this while guaranteeing closing of transactions promptly within NMP timelines. It can be rightly observed that although NMP remains to have structured clarity on classes and types of assets, method of valuation, mode of monetisation and timelines of asset monetisation, yet, the implementation of the same will be challenging owing to the pending clarity on the exact usage of these funds. 

Another obvious challenge is the participation and inclusion of private players. Public assets which were developed by the taxpayer’s money will be transferred to private players, therefore a watchful eye is necessary in this case. 

Everything said, the government seems pretty confident about this and is embracing each challenge as an opportunity to self-assess, adapt and grow along the process. 


The philosophy of creating capital through monetisation is imperative to produce employment opportunities, yielding high economic growth and improvement in overall public welfare. If implemented successfully, this can accelerate India’s infrastructure development and attract Foreign direct investment. This in turn will have a positive effect on domestic capital flow and reduce the deficit. 

Asset monetisation also adds to the GDP of the economy and will stimulate public-oriented developments, additional revenue and healthy privatization. With the inception of NMP, economic hubs will learn how to utilise government and private investments better. It will further pave the way for job opportunities, accelerate the housing sector and create demands in smaller towns and cities.  

NMP advocates a fair and transparent system for monetisation and its related affairs. This seems to be a well-thought step in reaching greater heights of growth and prosperity in India. Moreover, it is high time for the Indian economy to compete against big world players and set an example of strength and organised planning.

About the Author 

Adv. Gagan Anand is the Managing Partner of Legacy Law Offices, a leading PIE law firm with offices in New Delhi, Chandigarh, Mumbai, Nairobi, London, Seattle and numerous other cities.

A seasoned professional with over 500 PIE projects across 24 states of India and numerous overseas jurisdictions to his credit, he has served as the Chief Legal Advisor of the Punjab Infrastructure Development Board (PIDB) as well as the Honorary Advisor to the Punjab State Disinvestment Commission (PSDC). An active member of the International Bar Association (IBA), he has also served as a member of IBA’s prestigious Construction Law committee. He is also qualified to practice as a Solicitor before the Supreme Court of England & Wales.

He was awarded the foremost legal honor in India, the National Law Day Award (2010), by the Hon’ble Vice President of India in recognition of his merit in the field of Projects, Infrastructure, and Energy Laws.

Editorial Team 

Managing Editor: Naman Anand 

Head of C&WD: Namrata Bhowmik

Preferred Method of Citation  

Gagan Anand, “Creating Funds for Infrastructure Projects: Govt’s NMP to Raise Capital through Monetising Brownfield Assets” (IJPIEL, 12 January 2022) 


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