NMP 2.0: Asset monetisation to boost India's GDP by Rs 40 lakh crore

The government's NMP 2.0 is projected to increase India's GDP by approximately Rs 40 lakh crore over the next 5-10 years by unlocking value from public assets for reinvestment in new infrastructure projects, a NITI Aayog report noted.

The government's asset monetisation initiative under the National Monetisation Pipeline (NMP) 2.0, launched by finance minister Nirmala Sitharaman on Monday, is expected to increase India's GDP by approximately Rs 40 lakh crore over the next 5-10 years, noted a report by NITI Aayog.

The report highlighted that asset monetisation is expectedto play a key role in boosting infrastructure investment and supporting economic growth by unlocking value from existing public assets and reinvesting the proceeds into new infrastructure projects. Mentioning about the entire monetization plan the report stated "it is expected to increase the country's GDP by approximately INR 40 Lakh Crore (over the next 5-10 years)".

Projected Proceeds and Investment Strategy

According to the report, the Central Government's proceeds from asset monetisation during the period FY26 to FY30 under NMP 2.0 are expected to be approximately Rs 4.6 lakh crore. It noted that assuming 70 per cent of this amount is spent on publicly funded projects, around Rs 3.2 lakh crore would be directly invested by the government in infrastructure development.

The report further stated that the remaining Rs 1.4 lakh crore, which is expected to be invested in Public-Private Partnership (PPP) projects, could be leveraged for a higher investment impact. Assuming a leverage ratio of 1:2, this component could lead to an investment of approximately Rs 4.2 lakh crore, subject to a conducive financial environment.

In addition, proceeds accruing to Public Sector Undertakings (PSUs) are also expected to contribute significantly to infrastructure investment. The report noted that Rs 1.6 lakh crore in PSU proceeds could be leveraged to generate a higher investment of around Rs 4.9 lakh crore, further expanding PSU capital expenditure plans.

Economic Impact and Monetisation Targets

Based on these assumptions, the report estimated that Rs 6.2 lakh crore of Central Government and PSU proceeds may result in increased investment of approximately Rs 12.2 lakh crore in infrastructure projects.

The report added that applying a capital expenditure multiplier of 3.25 to this investment amount could lead to a significant boost in economic activity. As a result, India's GDP is expected to increase by approximately Rs 40 lakh crore over the next 5-10 years. NITI Aayog also stated that NMP 2.0 aims to achieve Rs 16.72 lakh crore through monetisation of assets across 12 sectors during the five-year period from FY26 to FY30. This target includes private sector investment of Rs 5.8 lakh crore.

NMP 2.0's Long-Term Vision

The report emphasised that asset monetisation under NMP 2.0 will help accelerate infrastructure development, increase private sector participation, and strengthen the country's long-term economic growth prospects by enabling higher capital investment and improved utilisation of public assets. (ANI)

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