Asset Monetisation is a core concept and a structured scheme in Indian public finance, distinct from privatisation, where the government transfers the right to use and operate an existing public asset to a private entity for a defined period while retaining the underlying ownership. The idea originated with a committee led by economist Vijay Kelkar in 2012. The formal scheme, the National Monetisation Pipeline (NMP), was announced in the Union Budget 2021-22 and launched by Finance Minister Nirmala Sitharaman on August 23, 2021.
The scheme was created to solve the problem of funding massive infrastructure development by unlocking the economic value of underutilized, operational public assets (brownfield assets). This process, known as "asset recycling," generates revenue that is reinvested into new infrastructure (greenfield projects) under the parallel National Infrastructure Pipeline (NIP).
The mechanism works by granting a limited-period license or lease to a private party, governed by a concession agreement. The private operator pays an upfront fee or periodic charges and manages the asset, which then reverts to the public authority at the end of the contract tenure. Key models include Toll-Operate-Transfer (TOT) and structured financing vehicles like Infrastructure Investment Trusts (InvITs). The NMP was prepared by NITI Aayog and is monitored by the Core Group of Secretaries on Asset Monetisation (CGAM).
The initial NMP targeted ₹6 lakh crore over FY 2022 to FY 2025. This framework has recently been succeeded by the National Monetisation Pipeline 2.0 (NMP 2.0), launched in early 2026, which is a medium-term roadmap for FY 2026–2030 and targets an aggregate potential of ₹16.72 lakh crore. The core philosophy of retaining ownership while transferring revenue rights remains the same.