Infrastructure Financing through Asset Monetization: Is it Sustainable in the Long-run?

Abstract

Infrastructure development is a key building block towards enhancing domestic economic growth and sustaining the higher growth trajectory. Therefore, creating new and upgrading existing infrastructure will be critical to improve India’s global competitiveness. Nevertheless, financing infrastructure projects continues to remain the most difficult aspect to tackle with. The National Infrastructure Pipeline (NIP) envisages investing Rs. 100 trillion on infrastructure projects across various States during the five years up to 2025. The Government of India has recently launched a four-year National Monetisation Pipeline (NMP) worth an estimated Rs. 6 trillion, with an aim to unlock value of hitherto unutilized or underutilized public assets in the brownfield projects by engaging the private sector and to tap the operational efficiencies of private sector along with the management of existing physical infrastructure. In addition, this paper provides various perspectives on the asset monetization and its sustainability as a robust infrastructure financing tool.