National Monetisation Pipeline (NMP)

This asset monetisation pipeline of Central ministries and public sector entities has been launched by the Ministry of Finance.

NMP aims to enable ‘Infrastructure Creation through Monetisation’ wherein the public and private sector collaborate to deliver socio-economic growth and quality of life to the citizens.

It will serve as a medium-term roadmap to identify monetisation-ready projects, across different infrastructure sectors.

It has been developed by NITI Aayog, in consultation with infrastructure line ministries, based on the mandate for ‘Asset Monetisation’ under Union Budget 2021-22.

Asset monetisation is a funding mechanism, based on the philosophy of Creation through Monetisation, aimed at tapping private sector investment for new infrastructure creation.

• NMP’s objective is to unlock the value of investments in brown-field public sector assetsby tapping institutional and long-term patient capital, which can be leveraged for further public investments.
• Such unlocking can be done by way of structured contractual partnership as against privatization or slump sale of assets.
• Instruments– Assets and transactions identified under the NMP are expected to be rolled out through a range of instruments.
• These include direct contractual instruments such as
  1. Public private partnership concessions and
  2. Capital market instruments like Infrastructure Investment Trusts (InvIT).
• Choice of instrument will be determined by the sector, nature of asset, timing of transactions, target investor profile and level of operational/ investment control envisaged to be retained by the asset owner etc.

NMP estimates aggregate monetisation potential of Rs 6.0 lakh crores through core assets of the Central Government, over a 4-year period (FY 2022 to FY 2025).

• Framework– Currently, only assets of central government line ministries and CPSEs in infrastructure sectors have been included for monetization.
• Monetization through disinvestment and monetization of non-core assets have not been included in the NMP.
• Process of coordination and collation of asset pipeline from states is currently ongoing and the same will be included in due course.
• The primary ownership of the assets under these structures continues to be with the Government with the framework envisaging hand back of assets to the public authority at the end of transaction life.
• Implementation– An empowered Core Group of Secretaries on Asset Monetization (CGAM) under the Cabinet Secretary has been constituted.
• CGAM was constituted as a part of a multi-layer institutional mechanism for overall implementation and monitoring of the NMP.