India’s ambitious infrastructure development agenda, a cornerstone of its economic growth, is at a pivotal point as it moves into the second phase of the National Monetisation Pipeline (NMP-II). With an aggressive target of over ₹3.5 trillion for road asset monetisation between 2025-26 and 2029-30, policymakers are re-evaluating their funding mechanisms. A significant shift is underway, with the Ministry of Road Transport and Highways (MoRTH) signalling a move away from the traditional Toll-Operate-Transfer (TOT) model in favour of Infrastructure Investment Trusts (InvITs).
This strategic pivot, while aimed at accelerating funding and broadening the investor base, presents a complex set of challenges and opportunities that will define the future of the nation’s highway network. The outcome of this policy choice will be critical not just for a handful of investors but for the millions of people who depend on a safe, efficient, and sustainable road network for their daily lives and livelihoods. The initial phase of the NMP, which concluded in March 2025, saw the road sector successfully monetise assets worth over ₹1.15 trillion. This achievement, approximately 73 per cent of its target, was a testament to the viability of a multi-model approach, leveraging TOT, InvITs, and toll securitisation. However, with the new phase setting a significantly higher target, the government is seeking a more robust and scalable solution.
The National Highways Authority of India (NHAI) has for the first time released a detailed asset monetisation strategy, which aims to maximise value, enhance transparency, and foster market development. A key element of this strategy is the launch of a public InvIT, designed to attract a wider pool of retail investors and reduce the over-reliance on a few institutional players. This democratisation of infrastructure investment is a critical step towards creating an equitable model where ordinary citizens can directly participate in the nation’s growth story. Despite the declared preference for InvITs, the future of the TOT model remains a subject of considerable debate. The model, which has accounted for a substantial portion of monetisation value to date, has its own dedicated class of investors, from large infrastructure firms to construction companies. The potential phasing out of this model risks alienating a segment of the market and could make the ambitious NMP-II targets harder to achieve. While the government’s aim is to attract a diverse set of participants, a single-model approach might not be sufficient to mobilise the vast amount of capital required. The challenge for policymakers lies in striking a balance—nurturing the promising InvIT market while also ensuring that the benefits of the TOT model, such as attracting private expertise in operations and maintenance, are not lost.
Ultimately, the choice of a monetisation model is a choice about the kind of sustainable and equitable infrastructure India wants to build. By attracting private capital, the government can reinvest funds into the creation of a modern, eco-friendly road network, reducing congestion and associated emissions. However, the move must be executed with clarity and transparency. By making its asset registers and valuation methodologies public, NHAI is fostering a more accountable system. Achieving the ambitious NMP-II targets requires not just a policy shift but a transparent and well-coordinated execution strategy that leverages the strengths of all available funding models, ensuring that the country’s infrastructure growth remains on a strong, sustainable, and inclusive path for all its people.
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