India's richest state is exploring tokenizing its own assets to fund new infrastructure

The Indian state of Maharashtra is developing a policy to bring its own assets onto blockchain, including a potential tokenization of electricity transmission infrastructure, with proceeds used to fund new power lines and energy storage.

"Maharashtra is working on a policy, so that we can create a policy which is conducive to government of Maharashtra bringing its assets under tokenization,” said Praveen Pardeshi, CEO of MITRA, or Maharashtra Institution for Transformation, a policy body under the state government.

Pardeshi, who also serves as a chief economic advisor to the chief minister, outlined the proposal during his keynote speech at "The Box Launch” on Friday, an invite-only event hosted by real estate tokenization firm RealX and MST Blockchain at Mumbai's World Trade Center.

Pardeshi used the state’s electricity transmission infrastructure as the biggest beneficiary of this proposal.

Today, the transmission lines earn steady fee income from carrying power across the grid, but the capital tied up in building them stays locked in place and can’t easily be freed up for new projects. He linked this to a problem Maharashtra faces today: the state generates a large surplus of solar power, but lacks the grid capacity to move it to where and when it’s needed.

Pardeshi said the state could potentially solve this by tokenizing a portion of its transmission assets, allowing investors to receive a share of the income they generate while providing the state with fresh capital for new infrastructure.

“The transmission lines can themselves be tokenized — not fully, but even 40%, 50% of that,” Pardeshi said. “People who hold that token can get part of the income which Maharashtra Transco Company is getting... the new money that it generates from the people who buy the token can help us to build more transmission lines, to build more solar energy storage centers.”

Tokenization refers to putting traditional assets onto blockchain, a process meant to boost transparency, broaden investor participation and improve the plumbing of financial markets. The tokenized asset market currently sits at roughly $38 billion, according to RWA.xyz, and most of that is concentrated in U.S. Treasury bonds and private credit.

Maharashtra, India’s richest state, accounting for roughly 14% of India’s nominal GDP and with a population of about 130 million, is looking to use this technology to move well beyond bonds and into assets that directly drive its economy.

Pardeshi illustrated the stakes with a pricing gap in the power market.

Distribution companies, or discoms, pay steep rates to secure electricity during peak demand, he said, even though power is often available far more cheaply on the exchange during surplus hours if only it could be transmitted and stored in time.

Discoms pay “16 to 18 rupees a unit” at peak, he said, versus a rate of “2 paisa” on the power exchange during surplus hours. He argued that better transmission and storage, funded in part through tokenized capital, could help close that gap.