Context
India’s infrastructure expansion is guided by the vision of Viksit Bharat @2047. Unmet infrastructure demand remains significant despite a 38% increase in government capital expenditure from FY20 to FY24.
Evolution
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- Evolution from NMP 1.0: NMP 1.0 (FY22–25) had an aggregate target of INR 6 Lakh Crore and achieved 89% (INR 5.3 Lakh Crore).
- Successes include increased involvement of institutional investors (pension/sovereign wealth funds) and the creation of Public InvITs, allowing direct citizen participation.
- Launch of NMP 2.0: Announced in the Union Budget 2025-26, NMP 2.0 covers a five-year period with a significantly higher estimated value of INR 10 Lakh Crore in new projects.
Strategy & Mandate
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- Vision: Unlock value from brownfield and greenfield public-sector assets to reinvest proceeds into new infrastructure creation.
- Core Mandate: Carrying forward the momentum of NMP 1.0 with a larger repertoire of assets while retaining public ownership of strategic assets.
- Guiding Principles:
- Focus on Core Assets: Assets central to service objectives (currently revenue-generating or substantially completed).
- Non-Core Assets: Included only if the project envisages further development (e.g., PPP models or leasing with predefined land use).
- Public Ownership: Transfer of rights for a limited period; public ownership is retained.
Key Objectives
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- Main Objective: Reinvest monetisation proceeds for the development of new infrastructure.
- Monetisation Modes:
- Infrastructure Investment Trusts (InvIT): Used primarily in highways and power.
- Toll-Operate-Transfer (TOT): Key for highways.
- Design-Build-Finance-Operate-Transfer (DBFOT): Standard for highways, ports, and railways.
- Operation, Maintenance and Development Agreement (OMDA): Preferred for airports.
- Securitisation: Backing transactions solely by predictable future cash flows (e.g., pipelines, transmission lines).
Approach
The approach follows the methodology of NMP 1.0 to ensure conceptual continuity.
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- Total Monetisation Value (TMV): The aggregate of upfront proceeds, present value of expected future proceeds, and estimated private investment.
- Aggregate Monetisation Value (AMV): TMV adjusted for the impact of depreciation in the asset during the concession period.
- Asset Categories for AMV: The report classifies assets into six categories (Greenfield, Brownfield, Mineral Resources, Strategic Sale/Divestment, Securitisation, and Private-owned Assets) to compute economic value.
Sector-Wise Targets (NMP 2.0 Award Target)
The total estimated TMV for NMP 2.0 is INR 16,72,300 Crore.
| Sector | TMV (INR Crore) | % of Total | Key Asset Examples |
|---|---|---|---|
| Highways & Logistics | 4,42,000 | 26% | 12,000 km operational roads, 15 MMLPs |
| Power | 2,76,500 | 17% | Hydro power stations, ISTL transmission |
| Ports | 2,63,700 | 16% | 44 core port infrastructure projects |
| Railways | 2,62,300 | 16% | 200 GCTs, 200 railway stations |
| Coal | 2,16,000 | 13% | Auction of ~94 coal mines |
| Mines | 1,00,000 | 6% | Mining Lease (ML) & Composite Licence (CL) blocks |
| Urban Infra | 52,000 | 3% | Redevelopment of 7 GPRA colonies in Delhi |
| Civil Aviation | 27,500 | 2% | 26 AAI airports (OMDA bundle) |
Minor sectors include Petroleum & Natural Gas (1%), Warehousing (1%), Telecom (0.3%), and Tourism (0.1%).
Impact of Proceeds
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- Allocation Heads: Proceeds are allocated to the Consolidated Fund of India (43%), Direct Private Investment (39%), PSU/Port Authority Allocation (15%), and State Consolidated Funds (4%).
- Economic Multiplier: Central Government capital expenditure has a multiplier of 3.25; every Re. 1 spent raises GDP by Rs. 3.25.
- GDP Impact: INR 6.2 Lakh Crore of proceeds is expected to result in INR 12.2 Crore of increased investment, potentially raising India’s GDP by INR 40 Lakh Crore over 5–10 years.
Conclusion
NMP 2.0 represents a strategic shift from pure asset ownership to service delivery and value realisation.
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