The Government of India has taken a major step to strengthen infrastructure funding by setting a monetisation target of ₹27,500 crore for the civil aviation sector under Aviation Monetisation NMP 2.0. This target will be pursued over the five-year period from FY26 to FY30 and forms part of the broader National Monetisation Pipeline 2.0 framework. The renewed approach aims to attract private investment into operational airports and select aviation-related public sector entities while ensuring that ownership of strategic assets remains with the government.

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This move signals a strong push to unlock the value of existing aviation infrastructure and use the proceeds to support capital expenditure, fiscal stability, and long-term sectoral growth.

Aviation Monetisation NMP 2.0 and the Policy Direction

Aviation Monetisation NMP 2.0 builds on the experience of the earlier monetisation cycle but with a much larger ambition. Instead of selling assets outright, the government plans to lease revenue-generating airports to private players through structured agreements. These arrangements are designed to improve efficiency, bring in modern management practices, and accelerate infrastructure upgrades without compromising public ownership.

The strategy reflects the government’s view that private participation can enhance service quality and passenger experience while also creating a steady revenue stream for public authorities.

Airports Selected for Monetisation

Under Aviation Monetisation NMP 2.0, eleven airports have been identified for leasing during the FY26–FY30 period. These airports are located across different regions of the country, reflecting a balanced approach to regional development. The identified airports include Varanasi, Bhubaneswar, Amritsar, Indore, Raipur, Trichy, Calicut, Coimbatore, Ranchi, Jodhpur, and Gaya.

These airports are already operational and generate regular revenue, making them suitable for monetisation under a public-private partnership model. The government believes that private operators can further enhance capacity, improve facilities, and support growing passenger traffic at these locations.

Role of Project Appraisal and Approval

Before the leasing process moves forward, the proposals for airport monetisation are being examined by the Public Private Partnership Appraisal Committee. This committee evaluates the structure, financial viability, and risk-sharing aspects of public-private partnership projects.

The appraisal process ensures transparency and safeguards public interest. Only after the committee’s review and approval will the airports be offered to private concessionaires through competitive bidding.

Leasing Framework and Concession Structure

Aviation Monetisation NMP 2.0 follows a leasing-based framework where airports are handed over to private players for long-term operation and development. These concession agreements usually span between 20 and 50 years. During this period, the private operator is responsible for running the airport, maintaining assets, and investing in expansion or modernisation.

Ownership of the airport land and core assets continues to remain with the government or the airport authority. At the end of the concession period, the assets are transferred back to the public authority, ensuring long-term public control.

Operation, Maintenance and Development Agreement Model

The main structure proposed for airport leasing under Aviation Monetisation NMP 2.0 is the Operation, Maintenance and Development Agreement, commonly known as OMDA. Under this model, the private concessionaire takes charge of daily operations, maintenance, and future development of the airport.

In return, the operator pays the government either an upfront concession fee, a share of revenue, or a combination of both. This model aligns the interests of the private player with airport performance, as higher efficiency and better services directly translate into higher revenue.

Monetisation Value and Expected Revenue

The total monetisation target of ₹27,500 crore under Aviation Monetisation NMP 2.0 includes multiple components. These include upfront concession payments made by private operators, the present value of future revenue shares payable to government entities, and committed private investment in airport infrastructure.

After adjusting for the depreciation of airport assets over the concession period, the effective monetisation value is estimated at around ₹22,500 crore. Most of the financial inflows are expected between FY26 and FY30, although some revenue may accrue beyond this period depending on the specific terms of each concession agreement.

Beyond Airports: Wider Aviation Sector Monetisation

Apart from airports, Aviation Monetisation NMP 2.0 also allows for monetisation of select aviation-related public sector undertakings. This may include strategic stake sales or equity divestments through initial public offerings or follow-on public offerings.

Such measures are intended to deepen capital markets, improve corporate governance, and unlock value from mature public sector assets while retaining strategic oversight.

Comparison with the Earlier Monetisation Cycle

The previous National Monetisation Pipeline covering FY22 to FY25 had set a target of ₹13,500 crore for the civil aviation sector. The revised target of ₹27,500 crore under Aviation Monetisation NMP 2.0 represents a sharp increase and highlights the government’s confidence in the sector’s growth potential.

This scaling up also reflects rising air travel demand, improved airport performance, and positive response from private investors in earlier airport leasing initiatives.

What Aviation Monetisation NMP 2.0 Means for the Sector

Aviation Monetisation NMP 2.0 is expected to reshape how airport infrastructure is managed and financed in India. By combining public ownership with private efficiency, the policy aims to deliver better passenger services, faster capacity expansion, and sustainable revenue generation.

For the government, it provides a non-tax source of funds to support infrastructure development. For private players, it offers long-term investment opportunities in a growing aviation market. Overall, the framework marks a significant step in aligning infrastructure growth with fiscal discipline.