Economy News

Asset monetisation seen to surpass Rs 1.67 trillion target in FY25

Led by sectors such as mines and highways, the NMP achieved Rs 97,000 crore in FY22, exceeding the target of Rs 88,200 crore in the first year of the programme.

Proceeds from the Centre’s asset monetisation drive are expected to reach an all-time high in FY25.

With three years of experience behind them and the build-up of pipelines, the state-run agencies will likely exceed the FY25 target of Rs 1.67 trillion by a substantial margin, a senior official said.

That would help achievements reach close to the Rs 6 trillion target by way of revenues accrued to various central/state government agencies and private investments during the four years through FY25.

Railways, which has been lagging in asset monetisation, will likely see an accelerated action to redevelop some key railway stations in the public-private partnership model in FY25, adding heft to the programme, the official said. Road asset monetisation by the National Highway Authority of India (NHAI) and private investment in mining including coal would continue to shine in FY25 as well, the official added.

Led by sectors such as mines and highways, the NMP achieved Rs 97,000 crore in FY22, exceeding the target of Rs 88,200 crore in the first year of the programme. At Rs 1,62,422 crore, the target in FY23 was double that of FY22. Despite falling short of the target, the achievement was 36% higher on year at Rs 1,32,000 crore in FY23. In the current financial year, the annual achievement is expected to rise further to Rs 1,50,000 crore even though it will likely fall short of the target of around Rs 1,79,544 crore.

Like in the previous years, the monetisation of assets in 2023-24 was led by coal blocks and other mines with the achievement expected to be around Rs 60,000 crore as against the revised target of Rs 55,000 crore and the original target of Rs 8,726 crore. While the target for this segment was enhanced to Rs 37,500 crore from the initial goal of Rs 6,060 crore for FY23, the achievement came in at around Rs 68,000 crore. Given the demand for key minerals and coal, the mining would continue to be a top performer in FY25 as well against the modest target of Rs 10,568 crore, which is likely to be revised up when the programme is rolled out. In mining, upfront revenues and private investment in the development of mining blocks are accounted for monetisation value.

NHAI, which has been the second biggest contributor to brownfield asset recycling in the past two years, will likely achieve around Rs 45,000 crore as against the target of Rs 43,979 crore for FY24, through a mix of Toll Operate Transfer (ToT), securitisation and Infrastructure investment trust (InvIT) models. NHAI’s asset monetisation has been one of the most robust among all, upfront revenue mobilisation will outpace the target of Rs 53,366 crore in FY25 as well, sources said.

The aggregate asset pipeline under the NMP over the four years, FY22-FY25, was to support investments under the National Infrastructure Pipeline worth Rs 111 trillion in six years through FY25. The NIP-NMP are designed to kick-start investment-led economic activity to boost growth and job creation.

Among others, asset recycling in power sector generation & transmission, oil & gas and port infrastructure are expected to do well in FY25. Railways, though lagging, will do relatively better in FY25 compared to FY24. The aviation and warehousing sectors are expected to pick up next year, another official said.

Railways, whose target was reduced to Rs 20,000 crore for FY24 from Rs 44,907 crore, is seen achieving around Rs 8,000-10,000 crore compared with Rs 8,000 crore in FY23. While railways have not progressed much in the monetisation of key assets such as stations so far, it would make some progress on station redevelopment next year.

Leave a Reply

Your email address will not be published. Required fields are marked *