The Ministry of Road Transport and Highways should retain both toll-operate-transfer and Infrastructure Investment Trust models for the National Highways Authority of India asset monetisation, given TOT’s strong revenue record, potential for higher premiums, efficiency gains, resource requirements, and the National Monetisation Pipeline 2.0 targets. International experience also supports model diversification. If any model must be discontinued, the Hybrid Annuity Model should be reconsidered, given its negative value for money and substantial risk exposure for NHAI.

India has prioritised infrastructure investment as the path for rapid economic development to lift its citizens from extreme poverty and to transform into “Viksit Bharat” by 2047—the centenary of Indian independence. Electricity, renewable energy, roads, ports, airports, etc, are being augmented through increased public and private spending. Road sector development has been especially prioritised, with the length of national highways increasing more than four times from 33,700 kilometres (km) in 1990–91 to 1,41,300 km in 2021–22 (Government of India 2025b). This has produced healthy returns to the economy in terms of lower logistics costs, impetus to industrial growth and employment in smaller towns, creating demand for other related sectors like cement and steel through backward and forward linkages, and all-round development of areas, captured by the Ministry of Road Transport and Highways’ (MoRTH) tagline, “Not Just Roads, Building a Nation.” Despite the serious environmental1 and social disruptions associated with road development (Bathla 2024), these trends must continue if India is to become Viksit by 2047. 

How does one spend more on infrastructure given the government’s resource crunch (the fiscal deficit of the centre and states combined in 2024–25 was over 7% of gross domestic product)? Part of the answer can be provided by financialisation2 of infrastructure through asset monetisation models. India has a large infrastructure deficit (second largest in the world as per estimates), existing side by side with a large pool of operational infrastructure assets (estimated at $16 trillion by the World Economic Forum [2017]), which can provide resources to bridge the infrastructure deficit through extensive use of brownfield asset monetisation.

However, on 26 June 2025, the Minister of Road Transport and Highways—Nitin Gadkari—said, “We will no longer continue with Toll-Operate-Transfer (TOT). The bundle size is much bigger in TOTs, where domestic players cannot even compete—we will go with InvITs [Infrastructure Investment Trusts] as a priority” (Business Standard 2025). The ostensible reasons for the decision are: boost domestic participation in road monetisation and enable the salaried class to invest. We think both these reasons are flawed, and therefore, the decision to do away with TOTs needs to be revisited. 

It is also ironic that the Asset Monetization Strategy for the Road Sector released by the National Highways Autho­rity of India (NHAI) in June 2025 (the same month as the minister’s announcement) talked about using both TOT and InvIT asset monetisation strategies:

By leveraging innovative models such as TOT and InvIT, NHAI aims to unlock the economic value of existing road assets, attract private sector investment, and ensure the financial sustainability of future highway projects. All the available modes for monetisation are complementary and competitive. Reliance on one mode alone would give sub-optimal results for monetization activity. (NHAI 2025) 

Surely, this document, before release, would have been approved by the minister and, as such, the minister’s statement quoted above exposes the policy inconsistency in one of the most dynamic sectors of India.

National Monetisation Pipeline

It is well known that India has a large infrastructure deficit. As per the first and only nationwide infrastructure plan released by the country in the form of the Na­tional Infrastructure Pipeline (2020), India needs to spend an average of $250 billion per annum on infrastructure and has been able to do much less—roughly $150 billion in 2022–23 (Government of India 2020; CRISIL 2023). Given this resource constraint, the country is looking for unconventional ways to finance infrastructure. One such way is to use bro­wnfield assets (completed infrastructure projects that are operational) to fund greenfield projects (new infrastructure). India has a large pool of brownfield assets (World Economic Forum 2017), part of which can be used to generate resources for fresh investments.........

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