NITI Aayog raises asset monetisation target for FY25 to Rs 1.9 trn

Govt may still miss the Rs 6 trillion NMP target

The NITI Aayog has increased the asset monetisation target for 2024-25 (FY25) by Rs 23,000 crore to Rs 1.9 trillion, moving closer to the overall Rs 6 trillion target set under the National Monetisation Pipeline (NMP) for a four-year period.

The NMP, unveiled by Finance Minister Nirmala Sitharaman in August 2021, has achieved Rs 3.9 trillion in the first three years, ending in 2023-24, against a target of Rs 4.3 trillion. However, even with the revised target of Rs 1.9 trillion for the final year of FY25, the government will miss the Rs 6 trillion asset monetisation target by roughly Rs 20,000 crore.

 

After several rounds of inter-departmental discussions in August, the Aayog — the central policy think tank and nodal monetisation department — finalised the target for FY25, according to an official familiar with the development.

Asset monetisation involves engaging private operators for government-owned, revenue-generating assets. The purpose of the pipeline is to recycle capital to feed into the Rs 111 trillion National Infrastructure Pipeline.

In FY25, highway monetisation is expected to generate Rs 54,000 crore for the Centre, while coal block monetisation is likely to bring in Rs 55,000 crore.

 

The railways, power, and petroleum and natural gas assets are targeted to raise nearly Rs 46,000 crore cumulatively.

Over the past three financial years, most ministries have not come close to their original NMP targets but have managed to meet their revised targets, with a few lagging sectors, including railways, telecommunications, warehousing, civil aviation, and sports infrastructure.

The central think tank has urged the railways to focus on the commercial development of railway land and has encouraged the civil aviation ministry to actively pursue the development of 11 airports in public-private partnership mode.

"The Core Group of Secretaries on Asset Monetization (CGAM), under the Chairmanship of the Cabinet Secretary, undertakes periodic review to monitor the progress of transactions and resolve structural issues, if any, for undertaking the projects in all the sectors covered under the NMP including the aforementioned sectors," Niti said in response to this paper's queries.

"In addition, issues that may arise in implementing the NMP targets are also addressed at inter-ministerial level undertaking deliberation and coordination, as required," it added.

The Ministry of Railways has monetised assets worth Rs 20,417 crore over the past three financial years, achieving 30 per cent of its revised target. In warehousing, the Centre has monetised 38 per cent of its targeted assets, totalling Rs 8,000 crore, while the Ministry of Civil Aviation has succeeded in monetising only 14 per cent of its targeted asset base of Rs 2,600 crore.

On the other hand, the government has capitalised on its coal and mining assets. Against an initial four-year target of Rs 80,000 crore, the Ministry of Coal has monetised assets worth Rs 1.54 trillion, while Rs 32,000 crore has been raised through the monetisation of mines, against a revised target of Rs 7,300 crore.

Meanwhile, the Centre has begun discussions on a second monetisation pipeline for the next five-year cycle, according to officials.