India’s infrastructure-led growth strategy is set for a major acceleration. According to a new report by NITI Aayog, the proposed National Monetization Plan (NMP) 2.0 could unlock as much as ₹40 lakh crore in additional GDP over the next ten years. Building on the original 2021 framework that targeted ₹6 lakh crore in asset monetization by 2025, NMP 2.0 pivots toward scaling up asset recycling and reinvesting proceeds into new greenfield infrastructure.
How NMP 2.0 Works: The Asset Recycling Model
The strategy focuses on monetizing operational public infrastructure assets such as highways, rail corridors, airports, ports, power transmission lines, and gas pipelines. These assets are leased under long-term concessions—typically 20 to 30 years—through structures like Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and Public-Private Partnerships (PPPs).
The report estimates that ₹1.6 lakh crore in proceeds could accrue to public sector undertakings (PSUs). When reinvested, these funds are expected to leverage up to ₹4.9 lakh crore in fresh capital expenditure, applying a multiplier of 3.25x—considered standard for infrastructure spending due to its strong backward and forward linkages.
National highways alone are estimated to offer ₹1.3 lakh crore in monetization potential, while gas pipelines and power assets provide steady revenue streams attractive to long-term institutional investors.
Projected Economic Impact: Multiplier at Scale
The economic logic rests on reinvestment efficiency and crowding in private capital. The model assumes that nearly 70% of monetization proceeds will be reinvested productively. For every ₹1 of public capital, more than ₹2 of private capital could be mobilized.
Over a 5–10-year horizon, the estimated ₹40 lakh crore GDP addition would translate into a 1–1.5% annual lift in growth. The ripple effects include expanded construction activity, domestic manufacturing demand for steel and cement, logistics efficiency gains, and the creation of 2–3 crore jobs across sectors.
Importantly, NMP 2.0 complements India’s planned ₹11 lakh crore capital expenditure push by FY27, helping bridge the country’s estimated $1.4 trillion infrastructure gap without significantly widening fiscal deficits.
Strategic Enablers and Execution Risks
The success of NMP 2.0 hinges on policy continuity and regulatory clarity. Streamlined land acquisition processes, faster dispute resolution through arbitration hubs, and ESG-compliant bidding norms will be essential to attract global pension and sovereign funds.
The first phase of NMP achieved around 40% of its target despite pandemic disruptions, monetizing ₹2.3 lakh crore through models pioneered by entities like NHAI and PowerGrid. This track record strengthens confidence in scalability.
However, risks remain. Roughly 30% of potential assets are state-controlled, requiring cooperative federalism. Tariff sensitivities, political resistance, and global interest rate volatility could dampen investor appetite. Ensuring equitable access—particularly in rural regions—will also be critical to avoid perceptions of exclusion.
Recycling Assets to Build the Future
NMP 2.0 represents a structural shift in how India finances growth. Rather than relying solely on borrowing, the plan institutionalizes asset recycling to create a self-sustaining infrastructure cycle. If executed effectively, the projected ₹40 lakh crore GDP boost—equivalent to a 10–12% cumulative uplift—could position India as a global infrastructure powerhouse by 2035.
The opportunity is substantial, but delivery will determine credibility. Transparent implementation, balanced regulation, and inclusive design will be key to ensuring that monetization becomes a catalyst for long-term, broad-based development rather than a short-term fiscal instrument.
(With agency inputs)
